Stress in the workplace is a reality we all face. Whether meeting deadlines, handling a demanding workload, or managing team dynamics, the pressures can quickly add up. For small business owners, understanding and addressing the issue isn’t just about creating a happier workplace but also protecting your business.

What is the Workplace Stress Problem?

A report by Gallup in 2023 showed workplace distress is a global problem, with 44 percent of employees stating they felt a lot of stress at work. And in the U.S., this persuasive problem impacts more than 52 percent of employees. 

When stress is short-term, it can have positive effects such as increased motivation and may focus your energy. However, distress is often prolonged, wearing out employees and leading to anxiety, confusion, and poor concentration.

What is the Cost of Stress for Your Business?

Job stress can lead to increased absenteeism, reduced productivity, and higher turnover rates, affecting profitability. A study by the American Institute of Stress estimates stress-related issues cost businesses more than $300 billion annually in health care costs, absentee rates, and diminished performance.

The effects don’t stop there. Stressed employees are more likely to make mistakes, struggle with decision-making, and withdraw from teamwork. This can lead to customer service issues, quality control problems, or even safety concerns.

What are Signs Your Team Members Might Be Stressed? 

Recognizing the signs of a staff member being under pressure is the first step in addressing the issue. Here are some common indicators:

• Increased Absenteeism: Frequent absences, often without notice or explanation. 
• Decline in Performance: A noticeable drop in the quality or quantity of work.
• Poor Time Management: Missed deadlines and frequent lateness.
• Heavier Reliance on Caffeine: A higher dependence on caffeine than normal. 
• Social Withdrawal: Employees who isolate themselves from team activities.
• Physical Symptoms: Complaints about headaches, backaches, or constant fatigue.
• Emotional Changes: Sudden displays of anger, anxiety, or frustration.

If you notice these signs, it’s time to take action.

How Can You Reduce Job Stress in Your Workplace?

The good news is that it won’t take a complete overhaul of your business practices. Here are seven areas where small changes can make a big difference:

1. Assess Your Team and Their Workload 

Being stretched too thin or at capacity can lead to burnout and stress. Consider whether it’s time to add a team member. While an additional expense, a new hire who fits your company’s culture and has the appropriate skills could greatly improve morale and retention among your current team, making it a worthy investment. You could also consider how hiring an intern or seasonal worker could lighten the load during a busy season. 

2. Improve Work Performance

Take a closer look at your company’s culture and processes. Are there inefficiencies or duplications causing unnecessary stress? Open up a dialogue with your employees to understand their challenges and work together on solutions. Clear communication, regular training, and well-defined job expectations can help employees feel more confident and less overwhelmed.

3. Support Career Growth

While not all employees may want to climb the corporate ladder, everyone appreciates room to grow and learn. Offer new challenges or responsibilities to keep employees engaged and motivated. This could include cross-training, taking on new projects, or increasing autonomy in their roles.

4. 4. Build a Sense of Community

Today’s workforce values companies that align with their values. Consider organizing community service events or supporting local charities. These activities can foster a sense of belonging and provide a positive counterbalance to work-related stress. You can also consider group activities to create fun and alleviate tension by offering regular coffee chat breaks or hosting games like trivia on Fridays. 

5. 5. Promote Physical Health

Encourage healthy habits by partnering with local gyms for discounts or organizing “walk breaks” during the workday. Small changes like healthier vending machine options or wellness challenges can promote better physical health and reduce stress. Try creating some camaraderie through in-office challenges for those who wear fitness trackers. 

6. Reduce Financial Stress

While pay raises might not always be possible, you can offer resources to help employees manage their finances. Partnering with certified financial advisors or educational institutions to provide workshops on financial planning can help employees get into a better mindset around money. Transparency about the company’s financial health can also help them feel more secure and engaged.

7. Address Workplace Conflict 

Allowing conflict to fester will create a tense environment. When issues arise, take all of them seriously and pay them due diligence, work with employees to resolve them quickly, be transparent, and document your actions. Ensure that employees know the process to report concerns, and maintain an open mind and an open door when employees express frustrations.

What’s the Most Effective Way to Reduce Job Stress? 

Flexibility and remote work continue to rank as one of the most important benefits a workplace can offer. One study showed that more than half of the employees surveyed stated that flexibility was more important than their salary. 

One of the best ways an employer can reduce job stress is to offer more flexibility, whether through remote work options or flexible hours. Flexibility allows employees more work-life balance, leading to increased satisfaction and productivity.

It’s important to note that workplace stress is not a one-and-done event but rather a slow and steady progression. Stay alert to the signs of tension and pressure among your staff and address them early to create a healthier, more productive workplace. A little attention today can prevent costly problems tomorrow. 

An HR consultant from INFINITI HR can help you get a pulse check on your current work environment with an employee engagement survey. They’ll also offer best practices and tailored tips to help you address any problems identified.

Interested in other current employment trends? Click the link to view the recent blog: Measuring Impact: Success of Workplace Collaboration check back for more on human resources, payroll, insurance, and benefits.

This article does not constitute legal advice, and there are subtle variations in employment law as it pertains to these topics, depending on where your business operates. It is strongly suggested that you seek consultation or legal counsel before making decisions about policies.

Your employees can make or break your business. For your small to medium sized business to thrive, you need to find ways to bring out the best in them. Removing barriers to success can also help build a strong and effective workforce. Empowering employees also enables them to achieve their individual goals and work aspirations.

Leaders play a crucial role in removing obstacles for employees to succeed. Here are some common barriers you can help address as a small business leader.

1. LACK OF CLEAR GOALS

Without clear goals and objectives to work toward, employees won’t know what you expect of them, which can also lead to decreased engagement and motivation. This can lead to lost productivity.  

What to do:

As a leader, provide clear and specific goals to your employees. Moreover, ensure everyone understands what needs to be achieved, how their role will contribute to the project’s success, and how success will be measured. Lastly, make sure you are accessible and approachable when employees need you. 

2. INSUFFICIENT RESOURCES

Inadequate resources can be a significant pain point for employees. Lack of the necessary resources to enable employees to do their job can lead to poor quality of execution, delays, and increased workload. Moreover, the result may be workplace frustration and decreased employee morale. 

What to do:

To enable employees to perform their roles effectively, ensure they are properly equipped. Ensure employees have access to the necessary resources and support to do their job and grow and advance. This also includes the right tools, technology, information, training, and a willingness to remove obstacles to their success actively. 

3. INADEQUATE COMMUNICATION 

One more essential component of effective leadership is communication. Communication is vital in the workplace. Poor, ineffective communication can create a communication gap, leading to confusion and misunderstandings. Also, a lack of open communication makes it harder for employees to work closely and meet expectations. 

What to do:

Facilitate open and effective communication channels to remove this barrier to engagement and success. Furthermore, schedule regularly occurring check-ins to identify and tackle obstacles to communication. Use these check-ins to promote transparency, encourage feedback, and foster a collaborative environment. Ensure that information flows freely between team members and departments. Lastly, continually ask employees what can be done differently and better to improve communication.   

4. MICROMANAGEMENT

Micromanaging creates the impression that you do not trust your team enough to work correctly. Excessive supervision can stifle creativity and discourage teamwork. When you seek to control everything employees do, they may develop self-doubt and lose confidence, leading to poor work performance.  

What to do:

Instead of micromanaging employees, focus on empowering them to take ownership of their work. Once you have hired the right people, trust their abilities, delegate authority, and help them practice accountability. This will allow them to thrive and make meaningful contributions while enabling you to focus your energy on the big picture. 

5. LACK OF RECOGNITION AND FEEDBACK

Employees who are recognized are 56 percent less likely to look for a new job. Not feeling valued is one of the most significant barriers to success. When employees feel their contributions are not recognized, their motivation, engagement, performance, and productivity may suffer. 

What to do:

To fix this issue, recognize and appreciate your employees’ efforts and achievements. In addition, provide effective, regular feedback and constructive criticism to help employees understand expectations, improve their performance, and feel valued. 

6. LIMITED GROWTH OPPORTUNITIES

Productive employees have career aspirations. Limited growth opportunities can lead to employees’ boredom, frustration, and work disengagement. As a result, they may search elsewhere for new challenges and progression opportunities.  

What to do:

As a leader, take a personal interest in employee career goals. That way, you can ensure your team has room for professional and personal growth. You can support your employees’ professional development by providing training programs, mentorship opportunities, and avenues for career advancement. Finally, encourage a learning culture and offer challenging projects to foster growth and engagement. 

7. INEFFECTIVE TEAM DYNAMICS

Negative workplace culture and environment will adversely impact your employees and your business. Poor team dynamics can breed distrust, create unhealthy competition, and generate employee frustration. This will also affect how team members interact and work together. 

What to do:

To combat these issues and ensure team success for effective leadership, work on actively promoting a positive and inclusive work environment. Create an environment where team members feel comfortable expressing their ideas, collaborating, and supporting one another. Lastly, address conflicts, encourage teamwork, and foster a sense of belonging. 

8. RESISTANCE TO CHANGE

Employees can be resistant to change. When this happens, it may lead to delayed execution of change, conflicts, and additional financial costs. Resistance to change can also hamper efficiency and productivity. 

What to do:

A vigilant effort from leaders can help employees to embrace change. Often, resistance to change occurs due to a lack of awareness. Providing a clear rationale, communicating the benefits, and involving employees in the decision-making process can help fix the issue. You can also consider offering support and resources during transitions to minimize disruption.

9. WORK-LIFE BALANCE 

Most companies want to achieve their goals within a short period. Frequently, they give employees more tasks and have them work long hours. However, when employees feel pressured, drained, or overwhelmed at the workplace, they are likely unproductive. 

What to do:

To improve productivity, promote work-life balance by encouraging flexible work schedules, supporting personal obligations, and setting an example through your behavior. Also, helping employees maintain a healthy work-life balance is a great way to prioritize their well-being, which can enhance productivity and job satisfaction.

10. LACK OF AUTONOMY 

Autonomy at work is essential. Low or lack of job autonomy can lead to a culture of mistrust, cause feelings of helplessness, and contribute to employee burnout. 

What to do:

Giving your employees room to do their job how they see fit is important. Empower employees by allowing them to make decisions and take ownership of their work. Providing autonomy fosters creativity, innovation, and a sense of ownership. In the end, this can lead to better results. 

By actively addressing these obstacles, you can create an environment that enables employees to succeed, thrive and reach their full potential. 

Interested in other current employment trends? Click the link to view the recent blog: Efficient Expense Tracking: Choosing the Right Expense Management Program or check back for more on human resources, payroll, insurance, and benefits.

This article does not constitute legal advice, and there are subtle variations in employment law as it pertains to these topics, depending on where your business operates. It is strongly suggested that you seek consultation or legal counsel before making decisions about policies.

Commission pay is synonymous with outside sales positions, but are there other possibilities of commission pay beyond reaching sales quotas?

What is a Commission Payment?

Definition: Commission pay is any money paid to an employee for the sale of a product or a service on behalf of their employer. Commission payment can be a set percentage of sales or a flat dollar amount based on sales volume. The most common commission structures are:

• Base salary + commission. These employees often receive a base salary that is lower than market rate for their positions, with the understanding that this salary will be supplemented through commission earning opportunities. Example: loan officer.
• Straight commission. These employees do not have the “safety net” of a base salary. Here, all compensation comes from commissions. This structure does best with seasoned sales professionals and for positions that qualify as exempt under the Department of Labor’s Outside Sales Exemption. Example: real estate agent.
• Draw against future commission. This commission structure is a hybrid of the two described above. A minimum base salary is guaranteed each pay period, but that base salary is drawn against future commissions. Example: car sales.

Commission Payments: The Fine Print

Commission pay is not attractive to everyone. It adds an element of uncertainty to an employee’s income that can be off-putting to the risk adverse or sales professionals who are new to their careers. Employers should keep attuned to their market and to those companies they compete with for staff to gauge the compensation design that will attract the most qualified and promising employees and really grow their business.

Additionally, members of your sales teams employed in positions that do not qualify for the DOL’s sales exemptions must receive the equivalent of at least minimum wage for all hours worked in each pay period and overtime for all hours greater than 40 in a work week.

There is, however, some flexibility with the timing of commission payments. Commission can be paid in conjunction with an employee’s base salary (if applicable) or at a completely separate time. For example, it is perfectly legal for an employee to receive her salary bi-weekly and her commission payments monthly.

Commission Payment: The Possibilities

Commission pay is an effective incentive to increase productivity and the rate of a company’s growth, but unless you are managing a team of outside sales professionals, it likely not a tool in your current incentive program. But should it be? Possibly.

The Retail Exemption. The Department of Labor allows commission for retail employees through its Retail Exemption, an exemption that can free qualified employers from their overtime rate obligations if their retail employees have sufficient commission earnings. With this exemption, the earnings of non-exempt employees can be driven by their sales numbers through a legally vetted method that will not increase their overtime pay rate.

For purposes of this exemption, qualified employers are:

• retail and service establishments where 75% of the annual dollar volume comes from the sale of goods and/or services
• the company must be in a recognized retail sales or services industry
• resale establishments do not qualify

Taking the long view. Another option is a commission program designed to recognize contributions beyond monthly sales quotas, such as:

• teamwork that supports company sales goals
• customer satisfaction
• lead generation

These programs reward employees for creating an atmosphere where future and repeat business become reliable sources of company income.

Commission vs. profit sharing. Many employers look for ways to incentivize employees to meet or exceed company sales goals, but not all have employees who meet the traditional definition of sales. For these companies, a profit sharing plan might be a good compromise. Both commission and profit sharing programs are designed to motivate employees for their efforts in reaching sales and business growth goals. This, however, is where the similarities end.

• Commission plans are a significant part of a sales employee’s compensation, whereas a profit sharing plan is generally pain in addition to a full market rate salary.
• Commission payments are generally paid out monthly to enforce the strong connection between reaching sales goals and increasing income, whereas profit sharing plans are generally paid out once a year.
• Commission programs are designed as incentives for sales professionals, whereas profit sharing programs generally reward all employees to some degree.

As labor markets continue to tighten, employers must utilize every tool in their arsenal to recruit and retain the best and the brightest. Although commission programs are – and will continue to be -synonymous with outside sales positions, companies may need to embrace some out-of-the-box ideas to keep actual growth in line with their goals. Adding a commission or commission-like element for all employees can be an appropriate move for companies that believe every job and every employee impacts their bottom line.

Here is what the government has to say about Commission Pay regulations as well.

FAQ on Commission Pay

Q1: How can companies ensure equitable distribution of commission pay in team-based sales environments to foster collaboration rather than competition?
A1: In team-based sales environments, ensuring equitable distribution of commission pay requires a carefully structured commission plan that acknowledges individual contributions while incentivizing collective success. Employers should consider implementing a tiered commission structure that rewards team milestones in addition to individual performance metrics. This approach can mitigate the risk of fostering unhealthy competition, as it emphasizes the importance of teamwork and collective achievement. Regular team performance reviews and transparent communication of sales targets and achievements are crucial. Additionally, integrating customer satisfaction scores and feedback into the commission calculations can encourage team members to work together to not only meet sales goals but also enhance customer relationships, thereby aligning individual rewards with team success and overall company objectives.

Q2: What strategies can companies employ to minimize the potential negative impacts of commission pay on employee well-being and job satisfaction?
A2: To minimize the potential negative impacts of commission pay on employee well-being and job satisfaction, companies should adopt a holistic and supportive approach. This involves offering a base salary that ensures financial stability, coupled with a commission structure that rewards performance adequately. Providing comprehensive training and development opportunities can help employees enhance their skills and confidence in achieving sales targets. Employers should also foster an inclusive culture that values open dialogue, where employees can express concerns and suggest improvements to the commission structure. Additionally, incorporating non-financial rewards, such as recognition programs and career advancement opportunities, can further motivate employees beyond financial incentives. Regular review and adaptation of the commission program to meet the evolving needs of employees and the business are essential to maintaining a positive and productive work environment.

Q3: How can organizations balance the flexibility and motivation provided by commission pay with the stability and predictability that employees need, especially in volatile markets?
A3: Balancing the flexibility and motivation offered by commission pay with the stability and predictability desired by employees, especially in volatile markets, requires a strategic approach to compensation design. Organizations can achieve this balance by offering a solid base salary component that ensures financial security, coupled with a commission structure that allows for upside potential based on performance. Additionally, implementing a cap on commission earnings can prevent unsustainable expectations and maintain financial stability for the company. Offering a buffer, such as a draw against future commissions during slower sales periods, can also help smooth income fluctuations. Employers should ensure transparent communication regarding commission structures and potential market impacts, along with providing support systems such as stress management resources and financial planning assistance. Regularly reviewing and adjusting the commission structure in response to market changes and employee feedback can help maintain an effective balance between motivation and stability.

Q4: How does commission pay align with our organizational goals and culture?
A4: Commission pay can be a dynamic tool for driving performance that aligns closely with organizational goals, especially those related to growth and productivity. By incentivizing specific outcomes, commission structures can cultivate a high-performance culture. However, alignment depends on thoughtful implementation that considers the unique aspects of your company culture and objectives.

Q5: What commission structure is most effective for different roles?
A5: The effectiveness of a commission structure varies by role and industry. For roles directly influencing sales, a combination of base salary plus commission might offer stability and motivation. Straight commission suits seasoned professionals in high-earning potential roles. For roles with fluctuating sales, a draw against future commission could provide a safety net. Tailoring the structure to the role is key.

Q6: How might commission-based pay impact employee satisfaction?
A6: Commission pay introduces variability that might not appeal to everyone. Transparency, clear communication, and support systems can mitigate concerns. Offering training and gradual transition periods for those new to commission-based roles can also enhance satisfaction and confidence.

Q7: How does our commission pay structure compare with the market?
A7: Competitive analysis is crucial. Your commission structures should be attractive compared to market standards, considering both direct competitors and broader industry benchmarks. Adjustments might be necessary to ensure you’re offering compelling compensation packages that attract and retain the talent you need.

Q8: What are the legal considerations for commission pay?
A8: Compliance with minimum wage, overtime regulations, and the Department of Labor’s guidelines is non-negotiable. Structures must accommodate these legal requirements, including adherence to the Retail Exemption for qualified positions. Regular audits and legal consultations can help maintain compliance.

Q9: How can we design commission programs beyond sales quotas?
A9: Broadening commission criteria to include teamwork, customer satisfaction, and lead generation recognizes and rewards the diverse contributions employees make towards company success. Such programs can foster a more collaborative and customer-focused culture, driving sustainable growth.

Q10: Should we consider profit sharing as an alternative to commission pay?
A10: Profit sharing can complement commission pay, especially in roles indirectly related to sales. It distributes rewards more broadly, aligning all employees towards the company’s success. Deciding between or combining these approaches depends on your strategic goals and the behaviors you wish to incentivize.

Q11: What are the long-term impacts of commission pay on our company?
A11: Long-term, commission pay can significantly influence company growth, employee engagement, and retention. Monitoring performance, adjusting strategies based on feedback, and ensuring the program evolves with your business are essential steps to maximizing its benefits.

Q12: How does commission pay fit into the overall compensation and benefits package?
A12: Commission pay should be one component of a holistic compensation strategy that includes base pay, benefits, and other incentives. Its design should reflect the overall value proposition you offer to employees, ensuring it supports not just recruitment but also long-term retention and satisfaction.

Q13: Are there innovative commission structures or incentives to explore?
A13: Absolutely. Exploring out-of-the-box ideas like gamification of sales goals, tiered commission rates, or bonuses for team achievements can inject creativity and renewed motivation. Tailoring these structures to fit your workforce and business model can set you apart as an employer of choice.

Click the link to view the recent blog: Why Small Businesses Need a Competency-Based Hiring Strategy or check back for more on human resources, payroll, insurance and benefits.

This article does not constitute legal advice and there are subtle variations in employment law as it pertains to this topic, depending on where your business operates. It is strongly suggested you seek consultation or legal counsel before making decisions about policies.