How would the 80/20 rule apply to employee/workplace culture?

 

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How would the 80/20 rule apply to employee/workplace culture?

The Pareto Principle aka the 80/20 rule suggests that in many facets of life 80% of results can be attributed to 20% of the input (give or take in the actual percentages). In your opinion, in small business, what 20% of input accounts for 80% of the results in terms of businesses that have created strong workplace cultures?

How would the 80/20 rule apply to employee/workplace culture?

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3 Replies to “How would the 80/20 rule apply to employee/workplace culture?”

  1. Employee empowerment. You can’t always expect them to make the right decision, but if you always demonstrate that you’ll be there to bail them out, and will stand behind their choice, you can sometimes reap huge rewards.

    It’s very often stated, but a great example is the Ritz-Carlton “$2,000 Rule.” Basically, any employee, from the night janitor to the General Manager, is fully empowered (and expected) to spend up to $2,000 to resolve any guest issues immediately. Iron leaked on a shirt with a wedding coming up? Send it to be dry-cleaned, or send a bellman to Macy’s to purchase a new one. Employee dropped a guest’s new iPhone while taking a photo of them? Apologize, and have a new one waiting in their room when they get back from the pool (with some complimentary drinks and apps, natch.)

    The average guest will spend over $250,000 with Ritz-Carlton over their lifetime. One or two incidents could make them lose out on hundreds of thousands in revenue. On the other hand, if they go back to work raving about the excellent service, you might get a couple new vacationers next year on their coworker’s recommendation.

    You don’t have to spend $2,000 every time someone makes a mistake, but to instill autonomy and empowerment in every level of employee can give them a feeling of ownership and hugely improve morale. For instance, if you operate a plumbing company, giving each plumber a discretionary budget quarterly or annually to provide free services or cash equivalents (fruit baskets, gift cards, charitable donations) could work well. If they show up at a home where they know it’ll be a tough bill to pay, or they know of an elderly relative or community member who could really use the $250, they have the authority to make that decision without having to immediately involve management. In terms of per-dollar marketing return, that kind of goodwill and “pay-it-forward” can get you a huge payoff for a small investment.

  2. Training employees, creating checklists, and follow-up meetings to make sure the work is getting done in line with the training and checklists.

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