Proactive Technologies Report – September, 2019

As recently reported in Industry Week, a group of CEOs from major U.S. corporations, The Business Roundtable, released a statement saying that shareholder value is no longer its primary focus – shifting their practices to line up with their new definition of the “purpose of a corporation.” The new vision emphasizes investing in employees, supporting communities, dealing ethically with suppliers and providing customers with value. “The group signed the  Business Roundtable’s new Statement on the Purpose of a Corporation. It’s a sea change that moves companies away from the age-old philosophy that companies’ main goal is to look after shareholders.”

There is an effective, proven alternative to cutting labor costs through gutting organizational capacity. 

Focusing solely on shareholder profits has stunted the long-term viability of many a thriving organization. Under the cover of “making the firm more efficient,” when more profits could not be derived from expanding the market and market penetration, some investors forced cuts on firms that determined a firm’s long-term capability to compete, take advantage of emerging market opportunities, and adapt to changing markets and turbulent economic forces. Read More

It is bewildering why management would spend the time and money, and risk employee morale time and again, on a employee measurement that isn’t.

Conceptually, the performance review has a purpose. It is to measure employee performance during a review period, identify areas of weakness and strength, and offer guidance on how an employee can improve on shortcomings and expand potential. But that is only possible if it is accurate to the job classification against which an individual is measured.

Several decades ago, performance review criteria became a template – one form fits all. In order for that to be possible, the metrics had to become more general, such as whether the individual “works well with others,” “completes projects on time,” “shows initiative.”  At best, these types of measures leave the reviewed wondering whose job performance is being discussed. At worst, these subjective measures leave a lot of latitude for the reviewer who sometimes deliberately or inadvertently punishes an otherwise good performing employee.

Studies have shown that performance reviewers rarely have a method to gather performance history for each employee throughout a review period, so they rely on their memory. Read More 

This approach makes a worker’s mastery of the job the focus, integrating into the company’s existing systems and standards by building structure around the loosely arranged worker development activities already in place. By structuring the unstructured worker training to make it work effectively and efficiently, this approach maximizes the use of resources already in place. Read More 

“One of the supervisors who participated in the program development said with clear certainty, ‘[I wish you had this when I started. When you hired me, I was just shown my desk and told to call HR or the manager if I had any questions. Yes, you had me attend some management classes on leadership, quality and striving for excellence, but I really couldn’t connect what was learned to my job since I had not yet learned what I was supposed to do and how to do that well. Until we completely analyzed all of the tasks that make up my job, I really had no idea which tasks I never have had a chance to learn or even knew I needed to learn them.’ “

What should be an obvious “must,” the notion that increasing worker capacity at all levels through task-based, deliberate, documented, measurable and verifiable structured on-the-job training is often usurped. It is replaced by a policy of hopefulness that workers will learn to perform the tasks of their job on their own or by osmosis or, even less effective and disappointing, attending a class here and there in expectation of closing the “skills gap.” I often discuss this in the context of production or service workers, but this extends to all levels of most organizations. The impact doesn’t go unnoticed by controllers and CEO’s under pressure to increase revenue or lower costs, but measures to correct this imbalance are seldom explored let alone utilized.Invariably, the most target-rich environment for harvesting huge savings and significantly increasing capacity is bypassed – either from a lack of understanding of what it takes to be a “subject matter expert” or entrenched neglect. Ignoring the need for structured on-the-job training is like investing in a state-of-the-art machine, then waiting for it to set-up and program itself. Even artificial intelligence needs someone to train it the first time to do the things expected in the proper way.

When one considers the serious collateral damage caused by underdeveloped or underutilized worker capacity (e.g. scrap, rework, loss of “tribal knowledge” when someone retires or moves on, loss of customer confidence, loss of employee confidence), red flags and alarms should be going off continuously, since all of these are present on a daily basis. Read More