"How do I get my employees to work harder and smarter?" This is a frequent question asked by business owners and managers. You should be concerned about maximizing the productivity of your business in good times or in bad. Most businesses have several financial, customer satisfaction and employee activity measures but few true productivity measures with goals. Simply working harder and smarter won't improve productivity. You also have to measure, monitor and improve continuously as a way to stay productive. The question you should ask yourself is "What are my productivity measures and goals, do my employees understand them and would my customers agree with them?"
There are several definitions of productivity including: do more with less, increase value and decrease time, do it better-faster-cheaper. A productive environment has well defined processes where extra steps and repetitive tasks have been eliminated, approval loops are quick, the location of common equipment is convenient for all, the tools are well maintained, accessible to all who need them and are updated when necessary. There is a feedback loop to correct the work process when it is off track or performing at a higher or lower rate. The work team is constantly looking for improvements to the system or the processes that they use and implementing changes in real time. Performance goals and measurements are understood and frequently updated based on achievement. Most importantly: Productivity needs to be defined and measured to be improved.
The role of your employees in creating a productive environment is critical. Your employees want to be successful, they want to know how their performance will be evaluated and they also want input on things that affect them. Simply imposing productivity goals and measures on them will not get your employees motivated to be more productive. They need to feel ownership for the productivity of the work processes and their role in it. You need to involve them in defining productivity, developing performance goals and standards and in improving the products and services you deliver. Additionally, asking your customers for input into some of the following elements is extremely important since they are the ultimate judge of your products and services.
There are four elements in defining productivity specific to your business that you need to take into consideration:
1. How do you define quality? This refers to accuracy, appearance, usefulness or effectiveness of the final product or service provided.
2. How do you define quantity? This addresses how much work is produced.
3. How do you define timeliness? This addresses how quickly, when or by what date the work is produced.
4. How do you define cost effectiveness? This addresses dollar savings or working within a budget, reducing the time it takes to produce a product or service, or reducing waste.
Once you define productivity you need to determine how to measure it so that you can determine what your goals should be. Some productivity measures to consider when setting your goals are:
* Short-term measures such as weekly sales reports, monthly attrition reports, customer feedback rating of your product or service.
* Long-term measures, including revenue or margin improvement, revenue per employee, changes in public image or in brand, product or store recognition.
* Client-specific measures such as additional business sold by a salesperson, reduction in repetitive repair calls by an installer, renewed subscriptions or contracts.
Once you and your employees define what productivity looks like you need to define goals, objectives and performance standards that are measurable, attainable, results oriented, and time framed. Some examples are:
* No more than a certain percentage of returns or rework rate
* At least X-percent of customers rate their experience good to excellent
* No more than X-percent schedule slippage per quarter
* X-percent increase in revenue from web business or customer referrals per quarter
* X-percent of customer inquiries responded to within two hours
Productivity for a landscaper is going to be different than for a retail store. The goals and how they are measured will be different as well. Something to remember about setting goals is that you first need to know how you are currently performing, (i.e. establish a baseline) and then set an appropriate improvement rate over that baseline. In some cases a 100 percent or immediate improvement is possible or necessary (i.e., zero foreign objects in food) in others a more gradual improvement may be appropriate (25 percent increase in Web-based business by the end of the year). Additionally, keep raising the bar on the goals.
You need to continuously improve your business just in order to keep up!
As a business owner or manager, your role among others, is to remove barriers to productivity, to establish clear goals and expectations and to involve your employees in solving problems. The following are some common barriers to productivity. I suggest asking your employees to assess their work environment in these areas as well as doing an assessment yourself. Compare the results , prioritize them and work with your employees at removing the barriers.
* Lack of understanding current business goals and objectives
* Lack of or ineffective planning
* Lack of effective teamwork
* Lack of clear roles and responsibilities
* Improper training
* Out-of-date tools and equipment
* Incentives that reward unproductive employees as much as productive ones
* Improper productivity measures
* Ignoring or not soliciting employee input
If all you do is evaluate your work environment utilizing the above list you will go a long way to understanding how to begin to improve your businesses productivity.
Nicole Barde is a management consultant and SCORE counselor in Reno with more than 20 years of management, human resource and organizational development experience. She will be a presenter at SCORE's Business Survival Workshop in Reno May 30.
