If you run your business or department like most people, you create a list of goals to hit, tasks to perform, and rules to follow. Employee spending runs wild because your workers are desperate to achieve those metaphorical gold stars next to their names.
It doesn't work — or, at least, it doesn't work well. If you want to control employee spending, you must develop an ownership culture within your business. Every worker who spends corporate money assumes ownership over the business and becomes integral to company success.
Control and Power
If you empower your employees to behave like entrepreneurs instead of cogs in the corporate machine, they'll exercise greater control over their own actions. In short, they become self-policing stakeholders, active participants in the vision of the company, and you promote a strong employee morale.
Flexible control puts responsibility in the hands of each employee. They have money to spend, but you've also given them a hefty dose of responsibility to manage that money well since funds are pre-allocated. These two factors, when combined, create an effective ownership culture.
Think of it as a challenge. You're communicating to your staff that you trust their judgment and believe in their ability to achieve results. Instead of arguing over expense reports and receipts, you're putting the ball in their court to exercise reasonable judgment.
Restraint and Responsibility
There's a reason why parents all over the world give their kids an allowance. This small parenting technique teaches kids how to budget their money. If they blow their allowance the day they receive it, they don't have any money until the next time Mom and Dad fork over the five bucks.
This same strategy works on a corporate level. If you put $1,000 in the hands of your employee for a specific business trip or set of supplies, that employee will figure out a way to stretch a buck. This simple gesture also perpetuates the ownership culture by giving employees the autonomy to make their own decisions and devise their own spending strategies.
Hire and Promote
Netflix’s culture manifesto ”freedom with responsibility” can be summed up in so many words: by bringing to the team creative, talented professionals that are being offered responsibility from their first day of hire, they will be driven by the company's successes and failures. Businesses that empower employees to govern their own expense budget can still maintain control by using innovative expense reporting systems to safeguard their money. These controls allow business owners to establish spending practices and track expenditures in real time.Thus, the ownership culture becomes a win-win situation: employees are able to spend company money to do their job well, and employers have control over how much is being spent.