There’s an old idiom that says, "The best-laid plans of mice and men often go astray." In other words, you may have plans for, say, an incentive program in your company, but as I’m about to illustrate—without proper systems to implement your plans, they are bound to go off course.
So, are we mice or men?
We had some interesting reactions to an earlier blog titled, "Too Many Wimpy Bosses," as some readers were concerned that my idea of a proper boss was a "task master," lording over employees to keep the wheels of production turning with the lash of a whip. But, NOTHING could be further from my mind than treating employees or anyone else in such a manner. I’m happy to say, our employees have been with our company for an average of over 10 years.
There is a time for us, as leaders, to actually LEAD—to "man up" and hold those under our stewardship accountable for the work they agreed to do at a certain wage—that is, IF they were given a company orientation to know exactly what was expected of them BEFORE they were hired. Of course, this means more systems needed to be in place, i.e. a written orientation system with all the company policies, procedures, etc.
If one of your vendors gave poor quality and service, wouldn't you demand better, or find another vendor? Therefore, isn't it reasonable that, if you are paying for someone's labor, you should have a right to good quality work and timely service?
Some suggest you need to regularly award people to motivate and incentivize them to do their job, and not just demand they do it. I agree to a point, but there needs to be a balance.
Several years ago, a friend called me about an opportunity for a great hire; someone he thought I should meet right away. I agreed, and during that meeting I learned that the man had vast experience—not only as a sales manager, but in other key positions at large printing companies.
The meeting lasted several hours, as we talked about many aspects of our industry, including incentive programs for employees. He informed me that, at his former employment, they started such a program to award employees based on productivity to motivate them, and he suggested we should do the same. That struck a chord with me!
At the time, I was right in the middle of trying to implement systems to measure productivity, and was finding it very difficult to accurately measure the productivity of individual employees. So, I was a bit surprised that this guy's company had somehow been able to pull that off.
I had come to the realization some time ago that, to find the productivity for a production employee, you need to measure Estimated Time versus Actual Time (for their jobs), to get a ratio. Then you need to measure Chargeable Hours versus Un-Chargeable Hours to obtain another ratio. Combining these TWO ratios gives you yet another ratio, which should be an accurate measurement of an employee's productivity. But—not so fast!
You also need to measure the amount of errors/waste an employee is responsible for, and what it cost the company for a given period. And, in order to be fair to an employee, you need to determine if the errors are Personal Errors or System Errors.
Stay with me...there's more.
What if an employee (the "Go-To Guy") is called upon to help other employees when someone is having trouble operating a machine or for other issues, which then affects the Go-To Guy's productivity. To be really fair, you need to consider giving some kind of exemption for such Go-To people, when they are called away from their work or interrupted. Whew! More systems!
I don't want to get into the weeds here, regarding all the variables management must consider when determining how to award or bonus employees, based on productivity. However, in order to do it FAIRLY, I have learned from experience, it takes a whole lot of systems working together in concert to pull that off.
Okay, so back to the Sales Manager’s interview and my being surprised that his company actually had an incentive program to bonus employees for higher productivity.
After explaining to this man the difficulty of measuring productivity, and discussing with him the things I mentioned above, he said, "To tell you the truth, my former employer had to discontinue the incentive program, because certain employees complained that it wasn't fair for everyone."
I wasn't surprised—now we were getting down to the truth of the matter, that his former company didn’t have a system in place to make it happen long term!
Some things to consider
To be FAIR, and in order not to go “astray” in your incentive plans to motivate employees with the carrot of rewards and bonuses—isn't it also reasonable that you should have a good tight system in place to measure what you are incentivizing?
Or should everyone get a trophy (bonus) for just showing up? Is that fair? Is it fair to the people in company who do their best job regardless of the carrot, while some others tend to slack off?
Fact is...I’m aware that there are other incentive programs—that are much easier to implement and track. But, fact is, implementing proper systems for operating a business—and MEASURING incentive programs that are fair to the employee AND to the employer—is not for “mice,” or the faint of heart.
Did I mention? Great Systems Work!
Philip Beyer, founder/president of Ebiz Products LLC and founder of Beyer Printing Inc. in Nashville Tenn., is a chronic entrepreneur, business systems analyst and consultant. Author of "System Busters: How to Stop Them in Your Business" and recipient of an InterTech Technology Award for the design and development of System100 business process management software. Beyer speaks to business owners across the country on how to bring lean, sustainable order to their businesses. Contact him at (615) 425-2652.