I was certainly not handed success on a silver platter. I did not inherit money to invest or take over a thriving family business I could grow to the next level. Everything I have achieved I built from scratch through hard work and enterprise, and often out of sheer necessity. More importantly, I didn’t do it alone. I learned very early in my business career the importance of treating people well—of showing them respect and encouraging their cooperation.
However, you have to be prepared to deal with people who have unrealistic expectations about how they might be compensated. I remember when we took Paychex public, we had a party; the management team at that time consisted of seventeen men. Afterward, one of the guys said, “Tom, could we get something to signify our entry into this thing?” I asked him what he was thinking, and he said, “Well, like a founder’s ring.” Another asked whether they could all have their portraits in the boardroom. I was floored. I’d started the company in 1971 and these guys hadn’t come on board until 1976, and they wanted a founder’s ring? Right then I made some decisions on who was staying and who was going.
We are all a product of what happens to us, and much depends on how we react to those moments when a life lesson is presented to us. One such experience occurred when I was almost seventeen years old. It was summer, so there was no school, and my father was trying to recover from the collapse of his own business. He had taken a job as a truck driver, delivering macaroni products. I went with him most days during the summer break to keep him company and help carry boxes into the stores.
I remember feeling uncomfortable about the work my father was doing. My father was Sicilian, and his family had run many food businesses. The company he was working for was also run by Sicilian immigrants, so one would have expected a certain level of simpatico between the owners and management and my father, especially since they had all emigrated from the same place and worked in the same type of business. Unfortunately, that was not the case.
I can’t remember exactly what caused the scene, but something had gone wrong in the warehouse and the manager laid into my father with a vengeance. He screamed at my father, “You are an incompetent, inefficient idiot.” I was stunned. I could feel my father’s humiliation radiating from him as I stood there silent, confused, embarrassed, and disgusted on his behalf. I didn’t know what to do, so I didn’t do anything. Neither did my father; he just took the tirade, and when it was over, he walked back to his truck and we drove off. The cab was silent, both of us keeping our thoughts to ourselves.
As I sat contemplating what had happened, I could feel my father’s excruciating pain balanced by stoic resignation. There was nothing he could do; he desperately needed the job, and his superior held all the power. I made two decisions that day. The first was that I would do everything in my power never to work for someone else, and the second was that if I was ever in a position of authority over people, I would never treat an employee so disrespectfully—ever.
I relate the story of my father’s dressing down because that event was foundational to my HR philosophy and my overall business belief of bringing everyone along with me and creating a good deal for everyone.
Working alongside my father that day made me question the balance of power and the responsibility of the person holding the power to wield it with integrity, fairness, and compassion. That experience was instrumental in forming my opinions on respect, leadership, empowerment, and organizational culture. A leader’s number one responsibility is to create a vision of growth and success, a vision for the following year’s achievement level, and to empower his or her employees to do the same. That’s what I always considered to be the most important part of my job.
I was always committed to my HR philosophy, but I can’t say I was the best person to deal with day-to-day HR issues. As an entrepreneur or manager, you don’t have to do or be good at everything. Delegation is a good leadership skill.
My best friend, Gene Polisseni, was a huge asset to Paychex. He was responsible for creating the sales organization and later formed the HR, training, and telemarketing departments. As I mentioned, he was also responsible for starting our 401(k) services, which today account for a significant portion of Paychex’s revenue.
I could see his office from mine; people would continually walk past my door to visit him. He was the company counselor; people warmed to him, and he gave good advice. He’d listen. I didn’t have the patience for that kind of stuff; I thought of Gene as the soul of the company.
It’s important to have someone who can take care of personnel issues. You can’t run a business without dealing with the challenges your employees face, both personally and while at work.
At the end of the day, the best way to treat employees is to go by the Golden Rule: do unto others as you would have them do unto you.
The thing with corporate culture is that either you have one by default, or you create one that fits with your philosophy and values. I would wholeheartedly suggest you do the latter.
In the very early days of Paychex, the company acted like a fraternity. My partners and franchisees were, for the most part, inexperienced in business and lacked the entrepreneurial qualities that would normally have been a prerequisite for starting a business. For example, our disparate group included a doorman from the Boca Raton Hotel and Club and two car salesmen.
Changing the corporate culture, therefore, was not without its challenges. One such area of conflict with my partners and employees was our annual sales conferences, which were held at exotic locations such as Hawaii, Arizona, Atlanta, or Disney World. Every year I’d get asked, “Why can’t we bring our spouses?” The argument given by those privileged to attend was that their spouses were part of their success. My counterargument was that to stay on budget, we’d have to halve the number of salespeople attending if we allowed spouses to attend. Not only that, where did the definition of spouse stop? Life partner, significant other, any plus one?
I also pointed out that the one year we did allow spouses to attend a lot of cliques formed, which was the opposite of what we were trying to achieve. That was really the heart of the matter. The conferences were about the sales team sharing ideas. The concept of it being work, albeit in a nice location, was lost on most of those attending.
The other issue against allowing spouses at these types of work events was that inevitably some overbearing or overly ambitious spouse would have the temerity to confront management demanding better terms or treatment for a significant other.
There was one further consideration, of course, and that was that conferences could be a little on the wild side. Most salespeople were between the ages of twenty-five and thirty-five, and they were away from home and letting their hair down. We had several occasions where somebody drank too much and harassed a colleague; I always felt the potential for disruption would escalate if spouses were in attendance.
This was partly the reason I began limiting alcohol at corporate functions. I still believe it has no place in a work environment, even when that work environment has a social aspect. It was, however, only part of the reason, because there was another catalyst for my change in attitude toward alcohol.
On the day we took Paychex public I attended the funeral of Gene’s daughter, who was the victim of a DWI car crash. She was a passenger in the car and was so badly injured that her parents were unable to say their last goodbyes; they were forced to have a closed-casket funeral. Both her father and I quit drinking alcohol that day, and to this day I think it serves no purpose. Especially in a business environment.
One event early in my career had a big impact on the corporate culture I built at Paychex and ultimately the respect we had, and still have, for employees. It occurred in my late teens when I was a bank teller.
I was checking my weekly paycheck and found a form outlining the bank’s support of the United Way Community Chest. It asked me to authorize the bank to deduct a minimum of 50 cents a week from my salary. At the time I thought little of it. I hadn’t heard of the Community Chest and was not about to support a cause I didn’t know. After all, I was also a good cause—my education was important—so I threw the form away.
Shortly after, my boss approached me to ask why he hadn’t received my authorization form. I explained my situation and that I had decided at this time it was more important for me to save for my education. I was polite and felt my reasoned explanation would suffice. It was then I learned a valuable lesson about how companies sometimes pressure employees to support causes that will bring the firm credibility and publicity.
The vice president of HR summoned me to his office. He told me that the bank expected all employees to contribute to the United Way campaign. I repeated my position and was told that if I didn’t comply, it would go on my permanent record. I remember feeling threatened by someone who should have had my best interests at heart. My heart was pounding, and it felt as though I was back again standing beside my father in the macaroni warehouse.
I promised myself that day that I would never demand any of my employees donate to a charitable organization, let alone threaten them, no matter how good the cause or how important participation was to the company or its image.
Since that day I have given over one-quarter of a billion dollars to charitable causes. I’ll go out on a limb and say I’ve more than made up for not donating fifty cents a week to the United Way while working for little more than minimum wage.
I wholeheartedly believe that senior management should show employees respect, but I’ve always felt it’s a two-way street. One of the things that always annoyed me at Paychex was when I walked through the offices after everyone had gone home and found messy, cluttered desks.
Maybe twice a year I would walk around a random department after hours and find a desk that was particularly messy. I’d throw everything on the desk into a waste basket. It didn’t take long the next morning for word to get around that I was always watching. I expected desks to be free of clutter when people left for the day. I realize this may make me sound like a control (or maybe clean) freak, but it was important to me and I felt it was important to our corporate brand. We processed our customers’ payrolls, so precision was fundamental to everything we did. I wanted to demonstrate that order and precision should be top of mind at every level throughout the company.
As I’ve explained, I believe that establishing a positive, well-defined organizational culture is important. However, lack of growth can stifle creative thinking and encourage an overtly political atmosphere. Balance is key.
Hiring and firing effectively is central to a good HR policy. The second employee I ever hired at Paychex is still with the company some forty-five years later. That’s a good hire!
I always worked on the general basis of hiring for attitude, training for skill. This may not be an original thought, but hey, if it isn’t broken, don’t fix it. Over the years I have developed several interview techniques, including testing, that help me identify the good from the not so good and the indifferent.
Being selective is one of the keys to good hiring. There is a cost to educating and training a new hire, not to mention a transition period where the person is not performing to full capacity. This is especially true of salespeople. I’ve always believed in building a quality workforce through skillful and careful hiring and through superior training.
As I mentioned previously, I’ve always been drawn to hiring people who played competitive team sports. There is something about people who like to win in a team environment that often makes them good employees. Ambition and perseverance are also attractive qualities in candidates.
I promised earlier to tell you the story of Jack Hartland. Jack wanted to be my partner some fifty years ago, and the more I tried to turn him away, the more determined he was to join Paychex. He worked for Pontiac, a division of General Motors, as a district manager, but he wasn’t happy. I got a telephone call one day from his brother-in-law, who told me they’d heard about our partnerships and franchises and said he and Jack would like to meet with me. I told them I only partnered with people I knew well. He pushed, and rather than be impolite, I agreed to a meeting at a restaurant, where we had lunch and talked about Paychex. They asked lots of questions, which I answered while making it as clear as I could that I was not going to partner with Jack, as I knew nothing about him. Unperturbed, Jack got up from the table, went out to his car, and brought back a wallet. He opened it up and an accordion-style series of pockets flipped out, displaying a dozen or so photographs. He said, “This is my wife, these are my kids, my dog, my house.” I looked at him with as much compassion as I could muster and said, “Jack, so what? I’m just not interested.”
I returned to my office and forgot all about Jack Hartland. A month later one of my staff came into my office and said, “There’s a Jack Hartland on the phone for you.” I remember thinking, That name sounds familiar, but I can’t quite place it. I picked up the phone and the voice on the other end said, “Tom, I’m ready. I’ve sold my house. I quit my job. I want to move to Houston.” I responded, “What?”
I asked him to give me a few more details and then told him to hang on. I put him on hold while I gathered my senses. What could I do? The poor guy had done all this just to become part of Paychex, so I said to myself, “What the heck?” I got back on the line and told him, “Be here for training starting in two weeks.” He did all right at Paychex and was a good sales guy.
There are other times you have to fight, well, almost, to bring someone on board who you believe will be a great asset to the company. Such was the case with Bob Sebo. He worked around the corner from my office as a district manager for General Motors’ Cadillac division, and we often met for coffee. He and I used to play euchre, a card game, regularly with my friends Gene and Gary.
Bob became interested in the concept of what I’d referred to as “recurring revenue” and what he called “residual income.” He liked that in the payroll business, you sold a customer once, and if you looked after their interests you could earn revenue from them the next year and the next. Unlike in the car business, where you had to resell a customer a new car every few years. He was correct, of course, that this was a more lucrative business model.
It was a long time ago and we were both young, so I wasn’t surprised when he asked me to meet his parents to help convince them it was a good idea for him to leave what they considered an excellent job at Cadillac to join what was still little more than a start-up. Bob’s dad was only about five five, but he was a tough, feisty guy. Bob told him he was leaving GM to come work with me, and I remember his father saying, “Are you frickin’ nuts?!” Then he looked at me and said, “I oughta kick your ass, and his too!”
I thought he was going to get up from his chair and deliver on his promise, but he calmed down and it all worked out well. Bob’s father ended up working in the business delivering payrolls; his mother took computer classes in her late seventies and became a payroll specialist for several years. Years later Bob’s father told him, “I sure almost made you make the wrong decision, didn’t I?”
Bob once said to me he hoped back then to become a “thousandaire.” Well, he ended up being a whole lot more than that. By way of an epilogue, Paychex still has some of Bob’s clients in his Cleveland office who have been with the company for more than forty years.
There have been hundreds of thousands of words written about how to interview job applicants, and I’m not going to repeat them here; what I will do is tell you how I handle interviews, or at least the key things I want to know and the techniques I use to discover whether someone is going to be good for the company. Interviewing can be simple. Keeping to the basics is often the best way to approach this important growth-oriented endeavor.
As I mentioned earlier, I look for people with ambition, people who have energy, people who want to win. If they want to win for themselves, they are going to want to win for the company.
I want a job applicant to have done their homework and to know a lot about my company; if they haven’t bothered to do their research, then why should I bother to give them my time? I also want to know why they left their last job or jobs. The answer to that question can raise a lot of concerns, or alternatively indicate I’m sitting opposite a future employee. For instance, they may start complaining about their former company or bashing management. Or they may start into a long-winded story. These are huge red flags. If they are reticent or unwilling to supply a reference for their most recent employer or any key employer, that is a major concern, as are obvious blanks in their résumé.
Want to know my most effective interview technique? Silence. Let the interviewee talk and when they stop, don’t say a word. What they say next may turn the whole interview into negative or positive territory, or they may simply wait for you to speak. Is there a correct way for them to treat the pause? I think the best thing they can do is let the silence hang. The interviewer may just be thinking or considering his or her next question or, like me, they could just be testing the person! The pregnant pause is a most effective tool in any interview.
Another technique I use is to listen and watch how they handle themselves throughout the interview process. I really believe the saying “Hire for attitude, train for skill.” It’s a lot easier to train someone to do a particular job than to change their poor attitude or manners. During an interview I will offer water or coffee to the candidate, which one of my assistants will bring them. I am looking to see if they display common courtesy by saying thank you to the person handing them their beverage. After the interview I watch to see if they leave the glass or cup on the table for someone else to clear away. Finally, do they push their chair back into place? To me, these few gestures of basic civility and respect tell me a lot about a person.
Finally, you have to question the validity of their references. HR departments have been trained to lie, or at least obfuscate the truth. Legally they have to be careful about what information they provide to you regarding an ex-employee, but there is a simple question they can answer and that is, “Would you rehire this person?” You could perhaps make that question more pointed by rephrasing it as, “Is this person eligible for rehire?” Asking one of those questions and listening carefully, not only to the answer but to the way it is delivered, may well tell you what you need to know.
The number one question you should ask yourself when hiring is, “Can this person help us grow?” The answer to that will be a deciding factor on whether to hire a candidate or move on to the next prospect.
Over the years at Paychex we used various types of personality testing to assist in either hiring or promoting senior management people. Used wisely these can be a useful tool for HR departments. I remember on one occasion all senior management took such a test, including me, and I thought the guy handling the analysis had done a good job. Until, that is, I read his report on me, in which he said I had a tendency to have an occasional emotional reaction to an issue. A few days later I saw him walking past my office and called him in for a chat. I told him that I didn’t think the description was accurate and that I was almost always calm and collected in my dealings with people.
He reviewed my file and said that there was no sign of this behavior during the interview portion of the test, but that it had come out of the written questionnaire. He then looked at me and out of the blue said, “Do you eat a lot of chocolate?” I was amazed, because I am known for my love of chocolate, but he would not have known this. It turns out that chocolate contains phenethylamine, a molecule that resembles amphetamine and some other psychoactive stimulants, so it can potentially be mood altering if you eat enough.
My point is that the more you can do to understand people prior to hiring them, the better, especially if they might turn out to be a chocoholic.
Hiring family members can be a risky strategy, primarily because it’s tough to fire them. I knew a car dealer who owned multiple dealerships that he ran with his daughter. They worked well together . . . until she got married and brought her husband into the business. Her father loved his son-in-law, and the young man was doing great in the business. Sometime later, the father sold the business to his son-in-law and even helped him with the financing. Unfortunately, when his daughter’s marriage ended, the whole business arrangement blew up in their faces. The lawyers were the only ones left smiling when it eventually got sorted out.
While I was at Paychex, I imposed a policy forbidding nepotism, which was extremely unpopular. Let me explain in more detail why rules around nepotism are so important for the effective running of any company. For example, if you have a supervisor who hires her nephew and is later unhappy with the job he is doing, what can she do about it? She is in an extremely difficult, if not untenable, situation. Not only does the supervisor’s relationship with the nephew become precarious, but her relationship with her own brother or sister may be affected as well. The company also suffers. If the supervisor doesn’t handle the situation delicately, one of two things happens: if she lets the poor performance slide, productivity suffers; if she has the courage to fire him, productivity suffers during the rehiring process. Nepotism usually doesn’t pay off for companies.
I suggest you use employment contracts for two main reasons. First, they are important, even for small companies, if you are to minimize the risk of employees leaving and competing against you, stealing your clients, or poaching your employees.
Second, and this is especially true when dealing with senior management employees, it ensures that both you and your employee fully understand how compensation is to be paid. If there are bonus situations or incentive contracts of any kind, the details of those need to be fully disclosed and understood by both parties.
A word of warning here: different states have differing ideas of what an employment contract is and its enforceability. Be careful to investigate the rules, regulations, and laws surrounding employment contracts in your jurisdiction prior to drawing up your contracts.
To employers, fringe benefits can be like a graduated income tax; they usually start out small, but over time they can grow significantly and become a large cost. I would caution any entrepreneur to be conservative when starting new fringe benefits, such as a 401(k) plan, and grow into them slowly.
Eastman Kodak, which no longer exists in the form it used to, had a very liberal pension plan, which eventually they could no longer afford to finance. This presented the company with a significant balance sheet problem.
Employers can operate 401(k) plans in two ways. One is where only employees contribute and contributions are taken from their paychecks. The other option is that employers can match some of the employee’s payments. My advice here is to be careful you don’t start something you will later regret or not be able to afford to maintain.
Providing health insurance is almost mandatory today. My suggestion, if you are a start-up or a fairly new company, is that you only pay for individual employees themselves. If they have a family, let them pay that portion. It’s a good way to get started, with one proviso: if your competition is offering better benefits, you may have to be more generous to remain competitive and attract well-qualified and desirable job candidates.
I have strong feelings not only about the necessity for high-caliber training but also about treating trainees well while they are undertaking training, especially when they’re away from home. This philosophy stems from how I was treated when I was a twenty-four-year-old sales rep working for Burroughs Corporation selling accounting machines. The company flew me and several others to Detroit for five weeks of training; we were not allowed to drive our own cars.
When I arrived, I discovered that my fellow trainees and I would be staying at a converted YMCA in a dismal and scary part of town. It was the sort of area where it was wise not to walk around alone. My room was tiny, about eight feet by eight feet, with a small bed, a dresser, and a bathroom down the hall. It was similar to living in barracks, and at 6:30 a.m., like reveille, a bell would ring to wake us up and a school bus would pick us up an hour later. It felt like prison transportation. It was midsummer, and the bus had no air-conditioning.
We’d arrive every morning at a factory building, which was okay compared to the dormitory, and breakfast, lunch, and dinner were provided. We’d work all day and then be transported back to the hostel. This went on for five weeks. To me it reflected very negatively on the company.
Without vehicles, my fellow trainees and I, all guys in our mid-twenties, were trapped in the wrong part of town with no access to anywhere we could get some rest and relaxation. After three weeks I’d had enough. I broke the rules and went back to Rochester for the weekend and then drove back in my car. This, of course, made me somewhat of a hero and very popular.
It was another defining moment for me. I decided that if I was ever responsible for a sales force, I would deal with my salespeople very differently. They would be housed in good hotels, given decent meals and transportation, and treated with respect.
How did this affect my overall approach to training? Six years after Paychex went public, we’d outgrown our head office facility. The offices we had built in 1983 were no longer meeting our needs. Our revenues had reached a staggering $101 million, and our growth rate over the previous nine years was between 20 and 25 percent; by the end of 1989 we had more than 100,000 clients. We made the decision to build a 107,000-square-foot addition onto our existing building, tripling its size.
The extensive amount of training we gave our employees was already at that time a key component of our success. It was one of the differentiators between us and our competition. The new extension allowed us to demonstrate that further. Our architect suggested that we place the training department in the main lobby so that when visitors arrived, they would be surrounded by classrooms.
This was revolutionary thinking at the time; training departments were normally stuck in basements or located off-site. The thought of visitors witnessing firsthand the importance of training excited me. Thousands of people visited our head office every year to learn about our products and services and attend sales training and other courses. The idea of showcasing training at our head office demonstrated to sales trainees and others how important they were to the company and the value we placed on their performance and contribution to the company.
Once the new addition opened, I’d walk into the building and wave to the trainees; it established a connection with them, and sometimes I’d chat with them in the corridors or even in the dining room. It was a marvelous leveler; they felt they were an integral part of the company and that we valued them—which of course we did. After all, they were the ones on the front line bringing in new clients every day. When they returned to their branches across the country, they talked about their time at corporate headquarters and had pride in being part of something bigger.
An added bonus is that Wall Street analysts take notice and are impressed. Today, Paychex delivers over a million hours of training (over 305,000 of those hours are instructor led) to its more than 15,500 employees.
Training remains at the heart of Paychex; today, if you walk into the impressive circular lobby of the company’s headquarters, you will stand at the reception desk and still be encircled by training rooms. Training is the core of our business, and that becomes obvious to every single visitor. And the people in those training rooms also know they are extremely important to the success of the business.
The new training center was also responsible for a great deal of in-house entertainment, some of which was at my expense. Trainees and management would prank me on occasion, and I managed to turn the tables on them a few times too.
Running a public company, it turned out, wasn’t just about numbers. One thing I was known for was keeping things clean and tidy, and trainees knew they would be in trouble if they left a coffee cup, trash, or food in a training room when they left for the day. (You might recall my story about emptying the contents of a messy desk into the trash.)
With that in mind, let me tell you the story of when the HR department pranked me—and good. We used to hold graduation day lunches. These were formal affairs; everyone was expected to wear business attire, and although celebratory, they were taken seriously.
During one such occasion, I was presenting Paychex’s four-year plan. Just as I was getting into my stride outlining the business plan, a loud noise started up behind me. I turned around and there was a person wearing janitorial clothing vacuuming the back of the room. I couldn’t believe it. I turned around and thundered, “What the heck is going on here? You can’t do that now. Can’t you see I’m making a presentation?” She looked puzzled and then brought out what looked like a work order and handed it to me. I gave it a cursory glance and said, “Forget it. Please leave!” The recruits were laughing, but I soon settled them down and got back to my presentation.
Later, the same woman started washing the outside of the room’s glass windows, which was once again highly distracting. Now infuriated, I marched out of the room and shooed her unceremoniously away—again. As I did this, I looked across at the dining room where the entire HR department had gathered; they were all laughing their tails off, and I suddenly realized, red-faced, the whole thing had been staged.
On more than one occasion, however, I got back at them. As I mentioned, I would walk past the training department several times daily, and on one occasion I noticed that everyone in the management training class looked especially bored. I thought no more of it until a few nights later when I bumped into some of the middle managers at a local bar and we got talking. They were all from out of town and we had a stimulating conversation. One guy impressed me a lot, so I pulled him aside and said, “Do you want to have some fun?”
Graduation day for this group came around and we were at the luncheon. As usual, I was scheduled to address the new graduates. I was known for going off script a little at these affairs, and the training instructors and the head of the department were always nervous about what I might say. I could see they were relieved, however, when I didn’t say anything controversial on this particular day. My address was followed by a Q&A session. That was when the fun started.
The manager, Chris, whom I’d met at the bar, stood up and complained, “I’m a little disappointed with our software when it comes to handling local income taxes.” I answered, “Yes, Chris, I agree, it doesn’t meet our standards, but we’re working on it.” I then looked around the room for questions from other people who’d raised their hands. Before anyone else could ask another question, however, Chris stood up again and said, “Tom, I’m not happy with your answer.” The instructor now moved into a position next to this guy and was resting a hand on his arm in an attempt to settle him down, or perhaps warn him of imminent peril should he persist with this aggressive questioning and complaining.
By this time, I was showing my irritation and said curtly, “We’re working on it. We’re doing it as fast as we can.” I answered a few more questions, and he stood up a third time and came at me hard. “I think your answer is bullshit.” I could see the face of the head of the department—she was horrified. I took a moment, looked long and hard at Chris, and said, “Look, that’s the way it is; if you don’t like it, there’s the door—use it!” At that, Chris stormed out.
My head of training’s jaw fell open; it was graduation day and I’d just thrown out one of her best graduates. The room was silent and in shock after Chris walked out of the room. A moment later, however, Chris came back into the room with an ear-to-ear grin and everybody started laughing and applauding our performance. I’m not sure I endeared myself to the training managers that day, but the trainees sure appreciated it.
We had a lot of fun in those days, and our trainees always knew I had their backs. I remember once dropping into a sales conference to check on the quality of the material we were delivering. I’d hired an outside consultant to make a presentation and wanted to hear what he had to say. On this occasion we had about five hundred salespeople in attendance and they were all, as was I, waiting to gain some new knowledge. Unfortunately, his opening words were, “Telephone marketing is vital, and what you are selling is an easy pitch. I could get on the phone, and I bet you in an hour I could make two or three sales.”
I knew that type of boast was not going to go down well with my highly professional and experienced salespeople, so I interrupted him and said I’d take him up on his bet. I went on, “I’ll arrange for a phone to be brought in, so our salespeople can see firsthand how you make those sales.” I’ve never seen a person fold so quickly; he actually ran out of the room.
My advice to you is to take training your employees seriously but have fun at the same time. Having a motivated, committed team in any department will repay any investment you might make in providing top-quality training.
This was one of my founding principles back in 1971, and as I write this, Paychex has recently been recognized as one of the Top 125 training organizations by Training magazine for the eighteenth consecutive year. In fact, it now holds twelfth place, jumping up eight spots since 2017. No wonder Paychex is one of the most respected payroll processing companies in the country.
Firing someone is never fun, but on occasion it is entirely necessary. I believe in giving people more than one chance, so I have rarely if ever fired anyone for a single misdemeanor. Of course, employment law needs to be followed in all cases, and there are plenty of books and websites that will educate you as to your legal obligations and responsibilities. The biggest piece of advice I can give you is not to procrastinate and to always deal with personnel issues immediately. Call the person into your office and talk to them; get their side of the story, offer assistance to help them get back on track if applicable, and move on, leaving them with the clear knowledge that the next time you call them into your office, the conversation will go a little differently.
I once had to reprimand one of my early partners who had become a regional manager after we consolidated the company. He was a nice guy and I liked him, but after a few drinks his behavior toward women became a problem, especially at sales conferences. He simply didn’t understand boundaries, and he persistently harassed female employees. To compound the problem, he was married, not to mention that one of the women he hit on was my girlfriend, but that’s another story—perhaps for my autobiography. I warned him several times and eventually had to call him into my office. I said, “You’re a slow learner—you’re fired.”
There are many grounds for dismissal, from poor performance and bad behavior to criminal activity, but there is another occasion where you may need to get rid of someone whose attitude is causing a serious problem, and that is when they exude negative energy. When I owned the Buffalo Sabres, we had a player who fell into this category. The rest of the team didn’t like him when he was on the ice (off the ice he was a nice guy), and he was affecting team morale. His work ethic was suspect, and on the ice he was an opportunist; he hung around the net waiting for a pass, so he could score and get all the glory. Although he was our top scorer, I traded him, and you know what? We won more games.
Negative energy can come down to something as simple as someone who constantly complains or whines about everything and nothing. I once had a senior manager who radiated negative energy; he was always complaining. On one occasion he came to me moaning about the number of intercorporate emails he received, telling me that most of them were unnecessary. I asked him to show me a few that were not important. Of course, he couldn’t and left my office hopefully reconsidering his attitude.
Business owners and managers often ask me how they can prevent negative energy from taking hold in their company. I tell them that the number one thing they can do is to grow—growth feeds positive energy. During periods of growth, people are happier, politics is reduced to a minimum, and there is little time for backstabbing; people are just too busy. When you stop growing, however, people get stressed, they get competitive fighting over fewer opportunities, and things begin to deteriorate.