Every year finance departments put themselves through the wringer, racing to meet an endless parade of deadlines. The crunch has intensified recently as finance teams labor to comply with new regulatory requirements even as they try to keep up with routine tasks such as quarterly and annual Securities and Exchange Commission filings and special projects like acquisitions or stock offerings. As a result, many finance staffers are simply exhausted. With still more work to do, how can CFOs motivate their most important assets to gear up again?
That question has plagued Wendy DiCicco, CFO of Kensey Nash Corp., a $61 million medical-device maker based in Exton, Pennsylvania, in recent months. "My team had the toughest year since I've been here," says DiCicco, who estimates her finance staff worked an average of 25 percent overtime over the course of the year. In addition to successfully achieving Sarbanes-Oxley compliance, her department completed a large-scale Oracle software implementation, supported the introduction of the company's first direct-to-market product, and began handling the finances of a new sales team. "A lot of people were feeling the burden of the heavy workload. I've had to really try to keep the morale going," says DiCicco.
The simplest way to reward a hardworking and high-performing finance staff would seem to be with generous bonus checks. But it's not always that easy, says Leonard Greenhalgh, a professor of management at the Tuck School of Business at Dartmouth College. Bonuses can raise questions of fairness among team members, resulting in the demoralization of those not rewarded as generously as others, he says. "Another problem is that when you give financial rewards, they tend to be expected the next time around," Greenhalgh adds. A bonus at year-end can also seem a long way off to a team that is pushing hard on a deal in June.
While Greenhalgh believes that CFOs in general tend to be less aware of the importance of motivational gestures than other managers, some do understand the role that small rewards can play. Regular recognition — as well as the boss's appreciative attitude — is the secret to keeping a finance team happy, motivated, and willing to put in the long hours that are often required, say finance executives.
Beyond the Bonus
Doling out big bonuses as a reward for her staff wasn't an option for DiCicco, as the company's fiscal year ended flat in June 2005 and the first quarter of 2006 showed the weakest results in five years, so she had to be creative. The CFO tried to show appreciation for her team by arranging regular lunches, happy hours, and a departmental holiday celebration.
DiCicco also distributes rewards such as gift certificates to acknowledge particular contributions. "Even though they're small amounts — maybe $50 or $100 gift certificates to a spa, a local restaurant, or Home Depot — I try to pepper them throughout the year so that people realize they're appreciated," she says.
Bill Augat, CFO of Elbit Systems Ltd., an Israeli defense electronics manufacturer with U.S. offices in Texas, Alabama, and New Hampshire, also looked for creative ways to encourage his team after a rough period last year. Augat had to scramble to keep his finance staff on track when his controller left the company two days into the close of the second quarter. To foster a sense of camaraderie in the newly depleted department, he had team T-shirts made and treated each finance staffer to a dinner for two after the company successfully closed its books on time.
Not Laboring in Obscurity
Augat also regularly sets up meetings for his finance staff with the company's corporate leadership and board members when they visit the U.S. offices. "Meeting with the parent company leadership gives the finance team a chance to ask questions and get some exposure. They get a kick out of that," he says. "People like to feel that someone notices what they do."
In addition to rewards, whether large or small, simple actions that demonstrate awareness of employees' lives beyond work can go a long way, says Michael Shea, executive vice president and CFO of Mac-Gray Corp., a laundry-facilities operator based in Waltham, Massachusetts. "People want to see that you're not treating them any differently than you treat yourself," says Shea. "You can't ask them to work hard on a project while you take off for the golf course. You have to be there working alongside them."
Shea notes that many of his finance staffers, after marathon stretches at their desks, appreciate gifts of time as much as money. He often rewards extra work with a day off during a quieter time of year. "On occasion, we even have administrative staff volunteering to help out at year-end audit time," he says.
When a weekend of work was approaching right before Christmas last year, Shea offered the finance team a choice of how to structure their working weekend. "I sat them down and said, 'I have bad news. We have this big project. How do you think we should go about getting it done?'" The team agreed to start early on Saturday in hopes of finishing in time to complete some holiday errands. "Consistent communication shows that you care," says Shea.
Providing such signs that the CFO understands how hard the team is working is the most effective way to encourage staff, says Greenhalgh. "What people appreciate like crazy is empathy," he says. "They want others to know what they're going through and that it's respected."
A Custom Fit
Also important is an understanding that nonmonetary rewards must be tailored to the recipient. DiCicco says, for example, that her younger employees seem to value different rewards than her slightly older staff. "Some employees love comp time, but they don't necessarily want to go out to lunch," she says. "So if they work over the weekend, I'll give them a Monday off."
Providing suitable rewards to particular personalities can be a smart approach, says Greenhalgh, who notes that many managers fail to identify the differences between staff members. "You need to be attuned to people's motivations," he says.
DiCicco is hopeful that her year-round encouragement will pay off despite a financially challenging year-end. "Do I think these little things make up for a small bonus? No, but I hope my department knows we're trying hard to at least do these small things," she says. So far, it seems to be working: no one has left her finance department in more than five years.
Kate O'Sullivan is staff writer at CFO.
CFOs on the Move
Home-furnishings retailer Bed Bath & Beyond has promoted Eugene Castagna to CFO from his role as principal financial and accounting officer. Former CFO Ronald Curwin is now SVP of investor relations.... Michael Mack is the new finance chief at Deere. Mack was formerly treasurer at the truck and tractor manufacturer.... Matthew Flynn left his post as CFO at magazine giant Primedia to head up finance at Hanley Wood, a publisher of trade magazines.... Michele Burns is leaving Mirant, the energy company she joined in 2004, to take over the finance department at Marsh & McLennan in March.... James Follo will step down as finance chief at Martha Stewart Living Omnimedia in March.... E-mail marketer Constant Contact has named Steven Wasserman CFO.... Edwards Lifesciences has promoted Corrine Lyle from CFO to president of global operations. Controller Thomas Abate will be the new finance head at the medical-device maker.... Paul Murphy is the new CFO at Lowrance Electronics, a maker of sonar and GPS products.... Nastech Pharmaceutical has named Philip Ranker CFO and corporate secretary.... Jens Meyerhoff joins Virage Logic, a maker of software used in semiconductor manufacturing, as finance chief.