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ArcaMax

Delegating the Right Way: Part 2 of 2

Cliff Ennico on

On the negative side, employees are expensive (you have to pay federal and state employment taxes on their wages) and have legal rights. Fire them for the wrong reasons and you may be staring down a wrongful-termination or discrimination lawsuit.

Independent Contractors. Like partners, they don't get a fixed salary or benefits, but unlike partners, they can be terminated for any reason or no reason.

On the negative side, because they work for multiple clients, they are less loyal to your business than your employees, and you may not be able to get hold of them when you need them. They are also much more likely than employees to try to steal your customers if their relationship is terminated.

Your Spouse and Family Members. Hiring your spouse or children to help with the business carries some excellent tax benefits. You are much more likely to count on their loyalty than non-family employees, and they may be willing to work for less than minimum wage. Hiring your children teaches invaluable lessons in the value of hard work and personal responsibility.

Just remember that if you fire your spouse or kids, you will still have to see them every day.

Having selected your delegates, it's now time to train and motivate them.

 

Training someone to do a particular task usually occurs in three stages: "I do; we do; you do." First, you show your delegate how to do it. Then the two of you do it together. Then you allow the delegate to do it herself under your close supervision until you're 100 percent sure she has the hang of it.

Motivating your delegates is much trickier. Generally, having spent time and money hiring and training your delegates, you want to be sure they hang around. You will need to consider the following, among other things:

--If they are employees, paying them prevailing wages in your community and offering them basic benefits.

--Paying competitive hourly or per diem rates if they are independent contractors (over-negotiating their fees ensures that your work will not be given priority).

...continued

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