Businesses in the U.S. and U.K. lose $37 billion a year simply because workers do not fully understand their jobs, according to a new IDC white paper commissioned by Cognisco, an employee-assessment specialist. Their confusion results in unplanned downtime, regulatory penalties, and other costs to companies.

Communicating effectively is a must-have leadership skill, one that’s essential to managing employees and growing a business. Although we have more tools than ever for sharing ideas — from texting to video conferencing — it seems that everyone is talking, but very few of us are truly listening. It’s imperative that employers and employees learn not only to hear each other out, but also to process what’s being said.

Here are three tips for sharpening your listening skills.

1. Don’t multitask. We live in a world of smartphone and computer alerts. Resist the temptation to check in every time one goes off. Studies show that our productivity drops by 10 percent whenever our focus is interrupted by unrelated sounds, so you’re better off checking messages later. Meanwhile, respect your colleagues by giving them your undivided attention when they are speaking to you.
2. Repeat what you hear. Studies show [PDF] that we only retain about half of what we hear, and our retention rate drops to about 25 percent a few days later. By practicing active listening techniques, we can hold onto more of that information — and put it to better use. Simply listen to what a person says and then repeat it back. (Paraphrasing is OK.) This has two benefits: It illustrates that you’ve heard what someone has said, and it ensures that you’ve understood the message as intended.
3. Ask questions. While someone is sharing information with you, ask questions related to the topic at hand. This demonstrates that you’re listening and forces you to remain an active part of the conversation. Great leaders actively solicit feedback from employees, and great employees show they are engaged in projects by asking questions that will improve their odds of success.

Do your employees frequently head out the door at the end of the workday without having completed many of the tasks on their to-do lists?

These staffers probably aren’t slacking off intentionally. It’s more likely that they’re bombarded with email and other distractions, notes Elene Cafasso, founder and president of Enerpace Inc., an executive coaching firm near Chicago. “Now that technology has us available 24/7, we never have time to think,” she says.

Although it may be frustrating to acknowledge low productivity among your staffers, there’s good news: Setting a few simple boundaries can help your employees focus and finish those projects you’ve been waiting for.

Here are four easy ways to get your employees back on track:

1. Invest in headphones. To help workers tune out office conversations and clamor, offer them a pair of noise-cancelling headphones. Better yet, let them buy their own and expense the purchase. “You’ll get a much better buy-in if the employee selects the headphones they want most, rather than giving them a pair,” notes Steve Deckert, marketing manager and rewards specialist at Sweet Tooth, an Ontario, Canada-based developer of e-commerce tools. The company’s team of 20 works in close quarters, and each new employee is allowed to pick out a set of high-end cans to help them stay focused on the job.
2. Set “office hours.” If co-workers continually interrupt one another with questions, create a schedule that gives them time to work alone and time to answer questions, Cafasso suggests. For example, ask everyone to remain at their own desks from 8 to 10 a.m., then allow for a half hour of open conversation to address questions and concerns. After that, it’s back to working solo until the next scheduled “office hours.”
3. Use time-management software. If your employees spend hours at the computer, helping them fight online distractions can boost their output. There are many time-management apps out there; finding the best fit for your office will depend on your specific needs. Sweet Tooth uses Strict Pomodoro, a Google Chrome extension with a timer countdown. For 25 minutes, certain websites, such as Facebook, are blocked. After that, a five-minute break kicks in.
   
4. Establish an email policy. Email is probably the worst offender when it comes to interruptions, Cafasso notes. To counter time lost on electronic communications, consider setting an email policy. If your employees don’t need to answer email immediately as part of their job, designate two or three blocks of time during the day for checking and responding to business-related email.

Time management is critical to small-business success: When you have fewer people to get things done, efficiency is key. Yet we all find ways to while away work time with activities other than actual work, such as using social media.

But Twitter, Facebook, and other sites offer plenty legitimate business uses, too. As the line between business and personal becomes increasingly blurred, how do you make sure your employees aren’t goofing off without micro-managing or destroying morale?

The Intuit Small Business Blog recently checked in with Suzanne Lucas (pictured) — also known as the Evil HR Lady — to get her take on the topic.

ISBB: What’s the current wisdom on managing how my employees spend their time? How much is too much when it comes to non-work-related internet use, phone calls, errands, side projects, and so on?

Lucas: In the old days, you could tell instantly if an employee was goofing off, because the difference between work and not work was obvious. In today’s wired world, unless you are actually looking over their shoulders, it’s impossible to tell if that tapping on a BlackBerry is a work email or a Facebook status update.

My suggestion is to look at overall results, and don’t worry about what your employee is doing right now. Some people’s brains work better with a bunch of little breaks; some people’s don’t. If someone isn’t performing at the proper level, speak to that person about performance. If they are spending too much time on the internet, address that as a performance issue.

It’s possible that you can have two employees who spend identical amounts of time goofing off, but one is a high performer and the other is a low performer. The latter needs to spend less time on the phone, internet, or whatever, and the former should be rewarded for good work. It’s not about butt-in-seat time anymore. It’s about performance.

I’m OK with non-work-related conversations and having some fun in the office. But what do I do about political, religious, or other hot-button topics at the water cooler?

You can’t avoid all of those things, nor do you really want to. The only restriction I would place on it is to keep everything legal — nothing that can be construed as sexual harassment, racial discrimination, etc.

Most of my employees manage their time just fine, so I take a hands-off approach. But one employee takes advantage of that. What’s the best way to deal with her without disrupting everyone else?

Handle that employee. You don’t have to treat everyone the same, you just have to treat everyone fairly. If she’s taking advantage of it, you need to correct it. You may need to be extremely clear, as some people just do not get it.

What non-work activities should be strictly prohibited?

Porn is obvious. Gambling. Drinking. Drugs. Otherwise, it’s totally dependent on the environment and needs. I was going to say online gaming, but then I realized I have two friends who are World of Warcraft addicts. [They’re] also Ivy League master’s degree holders, genius programmers, and have a tremendous workload which they successfully accomplish. So, you may run into Eric’s cube and see him playing WoW and declare that he is wasting time and should be fired — except that he’s already out-produced everyone else in the office. Again, it’s all about performance.

by Kevin Casey