Thursday, March 26, 2009

Boost employee productivity by keeping score?

In the search for ideas on how to improve employee productivity, earlier today I ran across an article from Colorado’s Steamboat Pilot & Today about a local business owner’s creative approach to improving his teams’ productivity.

Steamboat Motors manager Jeff Steinke has improved his bottom line and is helping other small business owners boost their own by putting his motto, “If you measure it, you improve it,” into practice.

“Make sure your employees know how they are judged. Establishing criteria in the short term is important. Employees need to know what they need to accomplish that day,” Steinke recently told a group of business owners at a seminar.

His approach to employee productivity at his dealership is based on his assumption that everyone is competitive by nature. In his dealership’s service department, where diagnostic and repair tasks can be standardized, he’s turned work into a productivity competition.

Here’s a clip from the article:

“In our service department, we sell time,” Steinke said. He observed that if a service technician can accomplish a repair usually allotted one hour in eight-tenths of an hour, that technician has achieved 120 percent productivity.

Steinke makes certain everyone in the service department knows who is achieving by posting a productivity scorecard on a door for all to see.

Business owners who adopt a similar technique can be prepared for the veteran employees initially to rebel but gradually come around to the new regime, he said.

“They’ll go out there and tear (the scorecards) down,” Steinke said. “It takes about two weeks to purge.”

He backs up his productivity charts with three-ringed binders stuffed with detailed job descriptions and pay scales tied to productivity levels.

In addition to posting employee productivity scores, Steinke works to improve productivity by giving employees a voice in how their departments run. Following recognition, being involved in their department is most important to employees and is “one of the biggest things we can overlook,” according to Steinke.

After reading the article, I still have some questions:

Productivity may improve when employees finish job in “eight-tenths of an hour” that were originally allotted an hour to complete, but was the quality of their work affected? Is the owner more focused on productivity than in producing a quality service?

According to the article, businesses should “be prepared for the veteran employees initially to rebel” when putting Steinke’s system into practice. Could turning work into competition hurt morale and cause resentment among employees?

What do you think about this approach to employee productivity? Leave a comment and share your thoughts.

1 comment:

Pom Freet said...

be careful of what you measure.

sure 120% "productivity" can mean a widget being placed in 80% of the time.

then factor in...
-- quality? (if it usually takes an hour to do it well, how confident are you that it's done well in 50 minutes?)
-- customer satisfaction? (probably up, since waiting time is reduced; but might go down if the job was shabbily done)

if you set up a game (e.g., a measuring/reward/point system) you're going to get workers who "play" the game; who know how to record time/work to their advantage under the rules of the system, regardless of the real-world outcome.

what you measure and reward is what workers will produce; set up a game, such as "productivity" measured in widget placements, and you can get plenty of widgets placed (if that's you're main goal).

however, if your goal is success, return business, quality, etc., you need to set up a game where those things are rewarded.

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