The eternal debate: What comes first, labor management or methods & systems improvements? Dynamic organizations continually improve methods & systems. Since a Labor Management Program is still the quickest and cheapest way to lower costs and improve service, the trick is to implement a flexible program that easily adjusts to the changes while maintaining labor control. The payback is just too good to postpone. PEP projects normally have a payback of between 10 and 14 months. What are your thoughts?
Labor Management Programs need to be accepted by managers and employees if they are to succeed. Providing the action-oriented information that managers need to run their operations is a great selling point. Assuring employees they will get credit for the work they perform helps gain their buy-in. Adding pay-for-performance incentives is a plus for both managers and employees. Incidentally, it is always easier to get acceptance in expanding rather than contracting environments. How did you get buy-in?
“How will we interfere with this program?” At a recent PEP proposal meeting, the IT Vice President made this embarrassing Freudian slip, instead of saying, “How do we interface?” Unfortunately, some IT departments forget they are a service organization. Others, however, successfully provide the support needed by operating management. We always hope IT will be supportive, but in either case, Cook & Associates maintains the PEP software and normally requires very little in-house IT assistance. Is your IT group supportive or a roadblock?
The Time & Attendance System(T&A) must be integrated with the Labor Management Program if the information is to have any credibility. At the same time, integration with the Warehouse Management System(WMS) will greatly reduce clerical requirements and improve the accuracy of data collection. However, if Warehouse Management System data is not available, simplified manual recording can be implemented. Has your organization integrated other systems with your Labor Management Program?
Over the years our clients have used a variety of techniques to achieve benefits from effective labor management through PEP. Hopefully, some of you will share your experiences with others and include the overall results. A survey we did found average productivity gains of 16% with an additional 12% (50% shared with the employees) if incentives were implemented. Also, work quality improved 8% and merchandise turn times were reduced by 12%. How does your organization measure up?
The foundation for all PEP labor management modules is work measurement. Although this requires establishing and maintaining engineered time standards, without these standards, accurate employee work measurement and meaningful operating statistics would not be available. There is no other way to account for all the variables in today’s logistics operations. Do you feel your measurement is accurate and how difficult is it to maintain the time standards?
“Best thing we ever did”. “Never again”. We have heard both. Our experience is that productivity and quality can be significantly improved by using an incentive program, but only if it is properly managed. Approximately 70% of our clients use the PEP pay for performance module. The program is normally a combination of individual and group results depending on each department’s mode of operation. If individual incentives can be used, they provide the greatest benefits. Is your organization pro or con?
Even with incentives, organizations must be sure that low performers do not offset productivity gains. The PEP employee performance review module is designed to prevent this from occurring. This is accomplished by identifying poor performers and initiating a three-stage retraining and probation program. In addition, unacceptable temporary workers are listed to prevent their future use, and high performing temps are highlighted for possible hiring. How are you using employee performance review?
Productivity cannot be increased at the expense of quality. Early in PEP, a client was concerned that incentives were decreasing quality. Whether our client had a real or perceived problem was immaterial, we did not have the right monitoring tool in place – that has been corrected. There is a wide discrepancy on the emphasis placed on quality assurance in various organizations. We think it is very important and have even linked quality with incentives. Is your organization monitoring quality?
Staff scheduling determines the number of employees required to complete backlogs and incoming work on a daily or weekly basis. Budget planning estimates staffing for fiscal plans and is normally done a year in advance. Cost and merchandise turn goals cannot be achieved without effective staff scheduling and cannot be hindered by poor budget planning. Frankly, most of our clients have not taken advantage of the PEP Scheduling module. Do you have an effective Scheduling program in place?
Not all clients remember some of the hidden features in our previous releases such as: macro data entry, many uses of the asterisk feature, automated graphing, task usage diagnostic tools, customized employee lists in performance review, etc. Since we are always striving to improve, there might also be some features that you would like to see that are not currently available. Why not share the special features you use and tell us about your wish list.
We have been very pleased with the stability of the PEP software over the years. When problems occur, or we have general labor management questions, I hope we have responded in a timely fashion and that our advice has been helpful. However, there may be some problems that slip through the cracks that we would like to know about. So let us know what you think about our support and if you have any outstanding problems.
Many of you probably know that Don was impressed with an article which pointed out that many new service company websites are geared toward providing more information rather than glitzy ads. So we decided our new website would have no pop-ups, sidebars, videos, links, or the need to register. It simply provides an overview of the Cook & Associates approach to Labor Management, summarizes our assignments & the results, and reviews the key features of the Program & the PEP software. Most of the comments and phone calls we received were very positive. Remember, it’s never too late to give the website a read and email your thoughts for inclusion in the blog.
We hope you find the revised Blog a good forum for discussion and will add your thoughts or responses to the dialog. Also, we are always looking forward to improving the Blog and would welcome your suggestions.
If you have any comments that do not necessarily fit under the above categories, please feel free to enter them in this section. We have covered a lot of subjects in the Blog, but know there might be some other topics that you would like to discuss. This is the place to start that discussion.