Time, however, always reveals the truth. The best employees don’t tend to stick around for years and years under a boss who treats them poorly or whom they don’t respect. And talented managers can typically turn around poor-performing teams if they are empowered to make changes.

In order to fortify the talent density in your workforce, for all creative roles hire one exceptional employee instead of ten or more average ones. Hire this amazing person at the top of whatever range they are worth on the market. Adjust their salary at least annually in order to continue to offer them more than competitors would. If you can’t afford to pay your best employees top of market, then let go of some of the less fabulous people in order to do so. That way, the talent will become even denser.

In retaining employees and keeping them engaged, we’ll cover the five activities of great (vs. good) managers (we prefer the term “coaches” — more on this later):

• Help people play to their strengths.

• Don’t demotivate; dehassle.

• Set clear expectations and give employees a clear line of sight.

• Give recognition and show appreciation.

• Hire fewer people, but pay them more (frontline employees, not top leaders!).

How you structure the compensation — variable vs. fixed — should fit your culture. If your culture emphasizes rugged individualism, like Nordstrom, you might want to have a high-commission/bonus-based compensation plan driven by internal competition among employees. Given the culture of teamwork at the Container Store and its emphasis on customer service, paying store employees a straight (and high) hourly wage without

commissions makes sense.

At the end of the day, the best way to respect and reward the A players on your team is to surround them with other A players. This is how you attract more A players. And it means you must invest as much energy into hiring as you expect the team to invest in their jobs. You cannot expect someone to keep giving all of themselves if you put someone alongside them who isn’t willing to do the same. You need to be as unreasonable in how you build your team as you are in how you build your product or experience.