Direct is Too Frugal??

How do you learn about the things he's not spending money on? Do you visit his location, or does it come up some other way? 

My first thought is to start with feedback:

• "When you don't spend money on [insert maintenance/safety item here], you add to the risk of accident, you open the company up to lawsuits, you violate company policy, etc. How can you change this?"
• "When you work all the overtime in your location instead of letting your directs do the work, it adds more stress to your job, takes away time from your managerial duties, and encourages your directs to slack off. What can you do differently next time?"
• "When you skirt the rules on ways to increase revenue at your location, you make me wonder when you'll cross the line rather than thinking you're doing a good job. How can you do this differently?"

If he continues with these behaviors, you can escalate to other measures. Add some accountability/reporting specifically about maintenance, check to make sure he does distribute some overtime to his staff, reinforce the rules and interpretations about what he's doing to increase revenue. Do you do one-on-ones with this direct?

He's trying to save the company money by doing these things, but there are places and times when doing things right or well is more important than doing them at lower cost.

flexiblefine
Houston, Texas, USA
DiSC: 1476

Assuming the budget is relatively accurate, and the deviation from your direct is > 15%, I'd say your direct has an integrity issue.  

I define honesty as the ability to make your words match your actions.  I define integrity as making your actions match your words.

A budget is an agreement between a cost center and the business regarding what it will spend to accomplish certain goals.  It's a commitment. A promise.  By not accomplishing those goals your direct isn't making his actions match his words (budget). 

Flexiblefine is right to recommend feedback as your tool for correcting this behavior.  Make sure you've established weekly One-On-One meetings with your directs before using feedback, or it will backfire.

I'm sure you're anxious to correct this problem.  Remember, this has probably been going on for a long time now.  Taking a few months to prudently approach a permanent resolution will pay off for you.  Listen to the Manager Tools Basics casts.  They'll give you the detailed direction you need to effectively help your direct improve.

--Michael

I agree feedback is the place to start. Even so, feedback may not be sufficient to affect change for this systemic behavior.

Given that your direct is sacrificing his own time to come in under budget (for overtime at least), I would not be surprised if your direct sees his behavior as a good thing. He may be confused when your feedback suggests that it is NOT a good thing. One on ones would be a good opportunity to learn how your direct sees things. Is he receiving mixed messages from the business? That is, what good things happen when he comes in under budget?

If this behavior is ingrained in his personality because of his up-bringing, he may struggle to just suddenly stop being frugal. Are you willing to work with him to remediate his behavior over time? If so, coaching could be helpful. Do you have another direct who models good budget decisions that you could assign to coach your frugal direct?

Paul

Mestocker, You may have to lean on your role power here slightly. In terms of sacrificing safety, in my industry, that is a non-negotiable. First up, feedback is good, but if you don't get an immediate change, then you may have to direct him rather than ask him.

Remember, once you are aware of a safety issue, your duty of care kicks in.

Tim