IN THIS COMPETITIVE INDUSTRY, QUALITY employees are integral to success. It is critical to any company, regardless of industry, to have a clear vision, purpose, and set of values. This clarity allows organizations to attract and retain associates who are ‘in alignment’ with the over-arching vision, purpose, and values, and more specifically, associates who make a good cultural fit with the organization. Without alignment and employee commitment, achieving priorities or executing initiatives within the organization becomes more difficult or not attainable at all.
At Shea Homes, we measure employee commitment via an extensive survey that we conduct every 18 months. This survey provides our leaders with feedback that we consider vital to our organization's continuous improvement. In addition to the survey, we conduct reviews twice a year to ensure that our associates perform to the levels expected of them, achieve their own career goals, and continue to fit into our company in a cultural sense.
At Shea, we go through a behavior-based targeted selection process to identify the right skill sets and cultural fit. It is ironic that 95 percent of the time, companies hire people based on prior experience (i.e., resume), and 95 percent of the time they terminate employees based on behaviors.
Future superstars in our industry will come from other industries and from the college ranks. I don't agree with the view that employees must have prior home building experience to succeed. Our industry has changed dramatically over the past few years. Our businesses are larger and significantly more complex. Today's leaders are different than industry leaders just a few years ago.
Clearly, a competitive compensation program is necessary to attract and retain employees. We often review market compensation benchmarks to ensure we are competitive in the market. Our compensation programs include a mix of individual and company performance goals.
One of my biggest concerns is that we big builders have tended to grow our respective home building organizations by recruiting from one another (i.e., within the industry). If we continue this, we'll end up over-compensating employees. When the dust settles, we'll look back and observe the same people in the industry working for different companies, and we'll have increased overhead costs by 25 percent to 30 percent—or more.
Training is critical to individual and company success. It is important to have job-specific training in addition to management training. A top salesperson does not necessarily become a top sales manager. As we all grow, sometimes people outgrow organizations and other times, organizations outgrow people. New associates must be trained and given a clear understanding of what it takes to be promoted from their current position. In addition, they must understand their long-term career promotion tracks.
Lastly, as obvious as it seems, it is important that we appreciate those who work for us and with us. Employees clearly want to be associated with winning companies, but they need to be appreciated for their contributions to the success of the organization. Make them feel valued.
As leaders of rapidly expanding organizations, we need to remember, when it is all said and done, this is still a “people business.”
Editor's Note: This column is a forum provided to the CEOs of America's largest home builders in cooperation with the NAHB. Address responses to Big Builder's editor at email@example.com.