CAN YOU USE SIMPLIFIED GAINSHARING IF YOU HAVE NO INDIVIDUAL MEASUREMENTS?
There’s a quick and elementary answer to the question posed above: no you really can’t use a Simplified GainSharing system if you do not have individual measurements in your DC. But in our experience, it’s rarely true that individual metrics can’t be developed, and surprisingly easily, to boot! Allow us to make a case for the ease of attaining individual measurements.
Let’s begin by taking a look at a couple of chapters from our book Warehouse Productivity – Improving Workforce Productivity With Simplified GainSharing:
MEASURE EVERYTHING INDIVIDUALLY
Most blue collar jobs can be measured by the individual worker, and should never be measured by teams or groups. Even those jobs traditionally measured by the group or department can usually be re-tabulated to find a way to skin this cat.
How? When in doubt about how to measure individually, just ask the people.
At first blush this might appear flippant or counter-intuitive. However nearly every time we’ve tried this approach, the blue collar people in the jobs have unfailingly told us how to measure their own productivity. The result is individual measurements in jobs that are traditionally measured by team numbers, or not measured at all. Perhaps the better question is: why do blue collar people have an interest in developing fair individual standards?
Some blue collar people will readily buy into the concept of being measured so they can earn gainshares, but this is not the overwhelming main reason for blue collar cooperation on this topic. Others truly believe in the concept of a fair day’s work for a fair day’s pay; but again, this isn’t the main motivator. The main reason – and this might sound a tad jaded – is that the blue collar people are just like your accountants. They too don’t want to see people earn free money. And they don’t want people in other sections accusing them of earning free money; so there’s also motivation from peer pressure at work here.
Additionally it’s akin to the banshees not wanting to bust their humps to earn bonuses for zombies. The over-riding motivation in all this is how blue collar people have a basic, and strong, belief in fairness. If they help set a standard that’s twenty percent below reality, they know that a bunch of people will be earning free money. And if they’re part of the group earning free money, they know that they themselves will be liable to accusations they are taking free money. They’re just as anal retentive as your accountants.
So every time we’ve sat down with work groups to discuss if there’s a way to measure individual productivity in their section, we’ve come away with either accurate and/or novel ways to fairly measure the individuals or we’ve been frankly told toward the end of a study that there simply is no way to measure these jobs individually (one quick example of this latter difficulty is trying to measure clericals).
Even though it’s counter-intuitive and one might be suspicious that blue collar people might set the standards lower in order to create easier gainshares, we have not found this to be the case. Supervisors in these studies frequently admit that the numbers they had in mind were actually lower than those the blue collar people recommended. The test is very simple; since team standards and productivity records are in existence, the workers’ recommendations on how to measure individually should add up to or exceed the historical team records.
SMALL TEAMS
Although we said that you should never measure performance by teams or groups in an incentive plan, there are some jobs that simply cannot be measured individually. In such cases determine the smallest number of workers that can be measured as a team, then use the basic Simplified GainSharing formula: achievement for one month, then adjust pay accordingly for the following month.
How do you create the smallest teams possible to do Simplified GainSharing? Easy. Just ask the workers involved. Tell them what you have in mind, and that you want to create the smallest possible teams, in order for you to begin a brand new incentive system. They’ll tell you how to do it.
Distribution centers actually offer even more opportunity for these methods, specifically because workers in warehouses or distribution centers are not wedded to machines or production lines. These workers have a lot more discretionary activities that are woven into their overall productivity rates. For example, orderfillers go to varying bins with each order; lift drivers pick up and move freight to and from varying places; shippers and loaders put varying cubes and weights into trucks.
Where measuring jobs in distribution centers is, as a rule, easier to figure out, not all jobs in the DCs fall into this category. For instance, the function of loading a truck might encompass consolidating, counting and loading, with an overall measurement of pounds per labor hour. The job of shipping one truck might be done by two or even three workers. In this case, the team might be just those two or three workers, but based on the same Simplified GainSharing principles. If the small team achieves the gainsharing levels, then give them all a raise for the following month.
Here’s a clue: when the workers tell you how to define and/or create the smallest teams possible, and you’re about to start Simplified GainSharing, allow them to be the ones to pick the individuals for is their team. This might appear unfair to some workers, since the banshees in the department are going to jump on the same team. And as a result of the self-selection process, you’ll see the zombies will all end up on a team. But this is all good. Even using the small team concept, you need banshees to drive the gains upward.
SUMMARY
To end, let’s encapsulate the basic steps for determining individual standards in a department where a Simplified GainSharing implementation is being considered:
1) Show the associates and the supervisor in the department the Associate Presentation for Simplified GainSharing. This way the associates will be familiar with the sliding scales & no caps, and will understand why it’s important to create individual metrics. Since they’ll want to participate in earning gainshare raises, the associates will be primed to be helpful in creating the individual metric.
2) Be familiar with the team or departmental measurement, preferably a thruput number, so management can understand the norm or standard for departmental performance.
3) Tell the associates the Company wants to install this incentive plan, but it’s important to establish an individual measurement. Ask them and the supervisor to speculate on how to create an individual measurement in their department that’s fair to the associates and fair to the Company.
4) Come to agreement on the best way to measure this department individually.
5) Take the proposed individual measurements and do a reality check against the departmental thruput or other traditional measurement to make sure that if the new individual measurements are added up they equal the total of the thruput measurement. If so, your individual measurements are valid.
Labor Development Group
Contact Pat Kelley: 603-494-4526ward708@aol.com www.gainshares.com
Contact Ron Hounsell: 847-328-8269r.hounsell@comcast.net www.gainshares.com
Thank you for a great blog.