Productivity enhancement for tough times
One solution in tough economic times is to “do more with less.” That’s what improving productivity is all about. They used to call it “more value for money”. And with less money to dish out, managers are looking for productivity improvements to help them cope.
A QUESTION
Would you rather have twenty employees producing 1,000 “widgets” a day or ten workers producing 750? The answer is quite clear. While the twenty employees produce 50 units each, the production of ten employees, at 75, is 50% greater! This can mean the difference between profit and loss; between survival and failure.
THE FORMULA
The productivity formula is simple:P=O/I. Productivity = Product divided by Input. The more inputs required to produce something, the lower the productivity. Conversely, more production done with the same or less input results in higher productivity.
MEASUREMENT
The first key to productivity is measurement. The manager must know what the employees are doing. What are they supposed to be producing? It is true that this can be more difficult than it seems. Employees produce something. Are they reports, customer contacts, completed service calls, product sales, etc.? Often there are several results/products. Determine the basic products for each employee. This will require some thought and thought, as what the employee is currently producing may not be what they should be producing.
STANDARDS
The second key is to set “standards.” Once we know what the employee must produce, how much must he produce and in what period of time? Standard setting is essential and will allow some measure of monitoring and evaluation.
COMPARISON
Can you compare what your employees are doing with what other employees are doing at similar companies within your industry? If so, your task is easier. You can make comparisons. This factor alone will provide some objectivity to the process. Sometimes these reports cover only a few types of jobs and do not take into account all of the factors unique to your particular environment. In either case, adjustments will be required. However, you’ll have a meaningful starting point for this part of your analysis, and industry comparisons provide a useful edge when dealing with employees.
ASSESSMENT
The data you have secured so far needs to be analyzed. Criteria, measures, standards, data collection procedures, and reporting will need to be adjusted. If the result is not what you expect or need, and cannot be adequately explained by system deficiencies or measurement difficulties, then you must take action. For example, if your workers are 15% below the industry average, why? If they are twenty percent above, why? If they are “correct”, why? Your analysis should include what you may be doing “right” as well as areas that call for improvement.
IMPROVEMENT TARGETS
When your monitoring system is in place, and you’re satisfied that it’s measuring the right things, measuring them accurately, and has an ongoing ability to do so, it’s time to consider improvement targets. The concept of “continuous improvement” is based on the premise that “nothing is perfect” and there is always room for improvement. You will need to set moderate, realistic and achievable goals. Remember the SMART goal setting criteria. The objectives should be:Sspecific, METEReasy, INreachable, R.realistic, and youprompt
CONSISTENCY
You’re not done yet. Successful organizations not only implement the above steps, but consistently apply these principles, techniques, procedures, analysis, and processes designed to create a more productive company.
DON’T FORGET QUALITY
Yes, productivity is important, but not at the cost of sacrificing quality. Shortcuts can be taken, processes streamlined, more “widgets” can be produced, but quality standards must be maintained.
A low-quality reputation will quickly nullify any profitability gained through productivity gains.
WHY IS THIS IMPORTANT?
Productivity improvement may be more important right now than at any time in recent history. Current economic conditions require cost reduction to maintain profitability. However, many companies are using a “meat hatchet” approach to the problem. They are cutting payrolls by laying off employees. Sure this reduces costs, but without a more methodical approach, any lasting gains may prove elusive.
Tough times call for tough measures, but productivity management is simply a good business practice that’s more important now than ever.
Copyright ©, 2008, Dr. Ben A. Carlsen, MBA. All rights reserved worldwide for all media. You can reprint this article in your ezine, newsletter, newspaper, magazine, website, etc. as long as I leave all links active, do not edit the article in any way, leave my name and bio box intact, and follow all EzineArticles Terms of Service for Publishers.
