How can we create an atmosphere of enthusiasm among our employees? There are five major areas: 

1. Effective communication and smooth operating processes 
2. Team building
3. Compensation systems 
4. Goal setting 
5. Evaluations. 

1. Effective communication and smooth operating processes

Disciplined processes and good communication are important from the standpoint of efficiency and improving client relationships, but there is a secondary result that can be of significant importance in managing your agency. 

When you're paying attention to smoothing out the internal processes involved in new business, renewals, billing, claims and accounting, the entire workflow system improves and client satisfaction improves along with it. That, in turn, infuses an atmosphere of competence and capability throughout the agency, which has the natural result of creating enthusiastic employees. People take pride in the work and the workplace and become enthusiastic about being a part of it. 

Related: Read another column by Philip Lieberman “How Agencies Can Best Measure Client Satisfaction.”

When communication with clients and underwriters becomes clear, professional and caring, misunderstandings and conflicts are reduced. When internal communication improves, tasks get done more efficiently, unnecessary quarrels are reduced and enthusiasm overtakes discord as the pervasive tone throughout the office. 

2. Team building

Take an honest look at your overall operations and critically decide if a team model seems right for your agency. It's really not unlike departmentalization, but the difference is in the underlying philosophy: command and control versus empowerment. 

A command-and-control methodology has several disadvantages, not only for the employees, but for the boss as well. Employees no longer think for themselves; they follow rules and regulations with a robot-like approach. Intimidation can be a debilitating factor when managers react to transgressions with verbal castigation, which is especially demeaning when done publicly. In such an environment, even though there are varied gradations of such behavior, the opposite of enthusiasm results. 

Although the boss may get a psychic reward from being in total control, micromanaging can result in burnout. Juggling many balls in the air at one time may be fun at the beginning, but it is wearing and inevitably becomes distracting and inefficient.

Empowerment, on the other hand, benefits both employees and management. Workers receive satisfaction from brainstorming ideas within their teams and seeing those ideas put into practice. Encouraging staff to think outside of the box and develop solutions to seemingly intractable problems raises employee morale. Managers can oversee the process and guide the direction of effort, but they also will benefit from being relieved of micromanaging. 

Manage the transition to the team model. Some employees, especially those who have functioned in a command-and-control setting for years, may find it difficult to cope with a less structured environment, with its responsibility and accountability. The change in morale will astound you once it develops momentum. 

Related: Read the article “Energize Client Relationnships” by Philip Lieberman.

Every team member should become involved in the process of team building: setting goals, establishing the team's overall mission statement and determining the necessary tasks. It is nothing short of amazing how buy-in gets created when the rules of the game are set by the players themselves. Yes, there are some techniques involved in the initial and ongoing process of developing teams, but don't let that deter you from getting started. There are a lot of resources available to lean on along the way.  

3. Compensation systems

This is one of the most parochial and inflexible areas in agency operations. We continue to pay staff the way we always have without critically looking at how enthusiasm can be dampened by outmoded protocols. Use these ideas to stimulate changes within your agency: 

• Commission schedules for producers should reflect your philosophy. A typical schedule is one that pays a producer 40 percent for new business and 25 percent for renewal. That's based on a belief that the producer should make a lesser percentage for renewals than what is paid for new accounts because much of the renewal work is done by internal staff. There's a certain logic to that thought process, but if the agency puts a high value on retention and encourages its producers to play an active role in the renewal process, then a 35 percent new and renewal schedule makes more sense. On the other hand, if the agency feels that its lifeblood comes from new account development and assigns virtually the entire renewal process to an account manager or CSR, then a 50 percent new and 15 to 20 percent renewal schedule might be a better fit. 
• Agents typically establish pay increases for non-producers using a percentage matrix. A mediocre employee might receive a 2 percent raise while a real star might get 5 or 6 percent. But let's look at how that plays out. If two CSRs are making $40,000 annually, the mediocre performer will get an increase of $16 per week before taxes, probably $10 per week after taxes. The star performer will receive a $48 weekly increase, about or $32 extra in her weekly paycheck. So the difference between the star performer and the mediocre one is a big $22 per week—hardly an effective motivational tool for anyone, and somewhat unfair to boot. 
• Nine or 10 years ago, there was a trend toward variable pay for non-producers. Under this concept, additional incentives related to business results and individual and/or team objectives supplement base salaries. Nothing is taken away, but future increases are mostly variable. Attainment of pre-set goals, whether agencywide, teamwide or individual, provides a more tangible and effective incentive for employees, including supervisors, and helps de-emphasize the small salary differentials between the average and the star performer. It's a better motivational tool and keeps people focused on what constitutes success in their jobs. 

4. Goal setting

Whether or not you use a variable pay system, setting goals for employees is a must for a well-run agency. If individuals don't know what is expected of them, how can we hold them accountable for not meeting our expectations? Goals can encompass various operational areas, but in setting them up, keep in mind these important aspects: 

• They should be aligned with overall agency goals.
• They must be stated in measurable terms; concepts and generalized goals don't work. As we've said before, you can't manage what you can't measure. 
• They have to be attainable, but not too easy to reach. Setting impossible goals only serves to dampen enthusiasm, not encourage it. 
• Design the goals with the team, creating buy-in. They should discuss important ingredients for success and create achievement standards based on those factors. 
• The rewards should be frequent, not annual. A “rewards bank” can provide a mechanism for quarterly payouts during the year with a final adjustment at year-end. 

5. Evaluations

Managers should take the time to have informal and periodic private conversations with their employees to discover what problems they are having and let them know about improvements they should make. That way, by the time the annual performance evaluation is done, there shouldn't be any surprises. 

Related; Read another Lieberman column “Non-client Communication.”

Use a standard evaluation form throughout the agency, distributed to all in advance so everyone knows the factors that are important to management. At each employee's annual review, go over the results so any areas of misunderstanding can be examined and resolved. Some firms have the employee do their own assessment on the same form and then compare them with their managers' assessments during the discussion. Either way, the individual should acknowledge receipt of his or her evaluation in writing. 

If possible, defer any conversation about pay raises for another time. When they are done together, many employees will be focused on the amount of their increase and won't hear or actively participate in the performance discussion. A possible way to arrange this is to have the pay discussion at year-end and the evaluation discussion on the anniversary date of the employee's hiring, thus spreading out the task over the year. This also gives the employee time to improve his or her performance before it becomes time to discuss a pay increase. 

There's a lot of room to try creative ideas to improve the morale and enthusiasm of staff. What could be more important that that?