Part 3: Three final steps in a program to measure and continuously improve employee productivity.
In the October/November issue of FURNITURE WORLD, the second part of this series discussed the first steps retailers can undertake to achieve continuous employee improvement. These were: Asses The Organization, Create and Communicate The Vision and Build A Base of Commitment.
Individual performance dimension
Your employees are the single most important component in the mix of store assets that affect productivity. If your organization were to lose its buildings or machinery tomorrow, it could rebuild. If however, it were to lose its employees, it could not. The Dimension of Individual Performance includes the factors of Performance Management, Skill Development, Communication and Personal Job Related Concerns. All of these factors relate to the “people” aspects of an organization and are covered in more detail below.
Performance Management: Performance Management is the way in which organizations clarify expectations, provide feedback, coach and counsel, monitor results and implement rewards and consequences.
The first step in developing and/or enhancing performance management skills is to implement a performance management system that will formally create written, measurable reports that include your expectations for each employee. Once these are written regular, ongoing feedback must be provided so that employee performance can be measured against those expectations and documented.
Next, performance appraisal systems must be reviewed to insure that they are being used in a manner that is consistent with the Performance Management System. Performance Appraisal Systems that are used once a year to justify salary raises are seen as a compliance requirement, not a business tool. The performance appraisal system should be seen and used as a process rather than an event. This process should help the employee and manager to recognize achievement, and identify areas where there is need for improvement.
The use of the performance appraisal system as a process should lead to the next step of creating a coaching and development plan for each employee. Performance Management must be seen as constructive and as a result allow the development of at least one critical job related skill in which the employee needs improvement.
A review of compensation systems should also be conducted to insure its philosophical and programmatic consistency to the performance management and employee development systems.
Then, procedures may need to be developed or altered in order to tie in both the regular compensation plan and related incentive programs.
For example, this type of approach was used for a retailer that traditionally rewarded warehouse staff based on seniority. The most senior members in the organization received the largest bonuses irrespective of actual performance.
Once an appropriate appraisal system was implemented, the actual performance of each member of staff was measured against standards set by a department manager. This made effective annual staff performance reviews possible. It also allowed the retailer to use the appraisal system to maintain a permanent performance record of all staff members and to craft a compensation program to reward performance instead of seniority.
Finally, the organization must create and implement a formal career development program. This program is a critical part of the succession progression planning process. Every employee must detail personal career goals and action plans to be reviewed with management for organizational approval, support and implementation.
Skill Development: The second factor in the Individual Performance Dimension is Skill Development. This factor is much more than just a training function. The entire scope of an employee’s progression through the hiring, installation and development process is implemented through his factor.
The first step begins with the hiring process. An interview analysis form should be developed that reflects the job requirements and specific criteria for selection. Then ratings are created and tied into specific categories that are used to assess candidates regarding their appropriateness for the job. These categories are comprised of knowledge and educational background, interpersonal attributes, particular job-related skills, and their fit with the organization’s style.
One of the major barriers to success that many retailers need to overcome is their inability to hire the right people. Using the approach outlined above will make a positive contribution towards overcoming this barrier. In addition, the organization should provide a formal training program to help managers enhance their skill levels in the areas of recruiting, interviewing and the selection process (see many articles on these topics in the sales management article archives on www.furninof.com.)
Another way to enhance productivity in this area can be based on a complete review of the organization’s training programs. A study or focus group created to assess these programs will often be highly beneficial.
These focus groups are usually made up of a representative sample of employees having a variety of job functions and representing different levels of seniority, pay and responsibility within the organization. As the skill development factor grows in an organization, it becomes important to create a set of procedures and systems to record and track employee development.
A study or focus group might, for example, suggest that a consultant be brought in to address poor skills in the repair/deluxing department or that a “Job Rotation” program be created to give employees a better overall picture of how the various functions in an organization relate to one another.
Communication: The next factor affecting individual performance is communication. This element is critical for transmitting and understanding the other factors. Communication must be a two way process in order to be effective. It must be open and informal, and designed to work both vertically and horizontally.
Of all the factors, this one would seem to be the easiest to implement, but is often the one that furniture retailers find needs the most attention. One step that should be taken to enhance communication is to establish a vehicle, such as a newsletter or quarterly management briefings through which senior management (or other management levels) can relate their vision, decisions and actions. Providing a rotating non-senior employee position on the senior management team has also proven highly effective. Other retailers have benefited by having a department such as the sales department, invite representatives from the warehouse or finance department to internal meetings.
Increasingly, organizations use teams and a consensus decision-making model. Each member of such a team should participate in the creation of guidelines for how the team will operate. These guidelines are comprised of issues such as how the team sets goals, shares information, assign/accepts roles and tasks, makes decisions, makes changes, resolves conflicts, solves problems and evaluates its own effectiveness.
Personal Job Related Concerns: The final factor in the individual performance dimension encompasses personal job-related concerns. This is the factor that deals with the “total employee.” It addresses both the tangible areas of compensation, benefits and incentives, as well as the intangible areas of job security, motivation and health.
The tangibles should be addressed by periodic compensation and benefit analysis. Reviews should take into account, if possible, industry averages and regional/local competitive concerns. After the analysis is done, an incentive program should be created that ties performance expectations and productivity increases into compensation packages. Finally, employees should be surveyed to determine their desires regarding benefits. Many organizations are moving to systems that create a “cafeteria style” benefits program. These programs provide the employee with a “menu” or list to choose from, up to a specific dollar limit.
Intangible personal issues must also be addressed. Retailers should investigate available health programs to insure that a comprehensive package of health-related programs is available for all employees. Issues of job security and motivation must be assessed and monitored on an ongoing basis.
develop support systems dimension
Having covered the first “dimension” of Individual Performance in this article as well as previously in the October/November 2005 issue (posted to the sales management article archive on furninfo.com), we are now ready to discuss Support Systems. These are the second overall dimensions. Support Systems include both organizational systems and planning factors. They provide the individual performance dimension with the tools needed to plan and implement policies.
Support Systems form the basis by which an organization creates and distributes its non-human resources. This area addresses marketing, accounting systems, policies and procedures, and business tools such as computers.
The first step in understanding how to increase the productivity of support systems is to ask the employees to identify their needs regarding business tools. A long-term plan should then be created to repair any of the systems that are inhibiting the successful achievement of standards. An additional study should be done to analyze the workflow to identify any areas that are lacking in efficiency and/or effectiveness.
The final factor is planning. Planning is designed to help an organization take its visionary components and translate them into day-to-day workable and prioritized implementation plans. The plans should also include aspects from other factors that were discussed in the October/November 2005 issue of FURNITURE WORLD, such as job responsibilities from the Commitment Factor and expectations and performance monitoring systems from the Performance Management Factor.
A Cascade Planning Model is a means of linking all aspects of an organizations roles, job tasks and responsibilities. It clarifies and eliminates any overlaps in role perceptions that might otherwise not be identified and effect the successful fulfillment of the plan.
The first step to creating and implementing a successful “cascade” planning model is to have the members of each functional team write out their perceptions of their own roles and the roles of the other members of the team. This will clarify any overlaps in role perceptions that might otherwise interfere with the successful fulfillment of the plan.
In conjunction with this team effort, each individual should identify the factors that are critical to the success of his/her job. Each factor should be accompanied by a set of metrics for measurement as well as a contingency plan for each metric that could affect the alignment of the plan.
Next, each function/department/individual should create a set of measurable work objectives. These objectives should address day-to-day operational issues, areas that are in need of repair, specific value-added improvements in the operation of the job and areas identified that require self-improvement.
Another key step is to identify the intradepartmental interdependencies required to achieve successful results. Then each objective must evolve into an action plan that identifies who is responsible for its completion, by when, and what resources are needed.
An example of an interdepartmental interdependency would be the overlap between the Customer Service and Delivery Department. The customer service staff must work closely with the delivery staff to ensure that realistic delivery times and dates are quoted.
One final step to insure that the appropriate time and resources are allocated to a particular objective or action step is to set accurate priorities. This is done by first creating a list of tasks that need to be accomplished. Then divide the task into two categories. The first category is composed of the important tasks that support the corporate mission. The second category includes urgent tasks that deal with day-to-day fires. Schedule the important tasks, allowing plenty of uninterrupted time to deal with them, while allowing appropriate amounts of time to deal with the fires.
Step six- Do It Over Again
The final strategy for action is probably the biggest and most important of all. The initial steps discussed early in this article were designed to assess where a retail organization finds itself and where it wants to be. Once the organization has completely worked through each of the five dimensions outlined in these two articles, it is time to determine the level of accomplishment to see if initial goals have been achieved. The six dimensions are:
- Step One: Assess the organization.
- Step Two: Create and communicate the vision.
- Step Three: Build a base of commitment.
- Step Four: develop the individual performance
- Step Five: develop the support systems dimension.
- Step Six: Do it over again.
This process is iterative. The organization should always be aware of its current status regarding all of the factors that impact people productivity. This means that there are always measurements to be taken and adjustments to be made again and again and again and again!
Philip Pugh, an experienced consultant and Business Manager specializing in Process and Organizational improvement and is the Operations Director for Tribune US, Inc (TUS) a consulting company based in Washington DC. Tribune US, Inc. TUS is a subsidiary of Tribune Business Systems Ltd., a London based company. TUS offers a range of products and services to customers in the Retail, Financial Services, Insurance and Manufacturing sectors.
Tribune US, Inc is a recognized specialist in the field of Process Management and Process
efficiency with applications to assist in
continuous improvement. If you have questions about this article contact Mr. Pugh at email@example.com.