the action of a lever or the mechanical advantage gained by it
For example, starting in the early 1900s, there were Davenport manual turning machines where you had one person operating one machine.
Now we have CNC machining centers (Computer Numerical Controlled machines), where fewer people generate more throughput. A CNC machine can produce parts faster than a manual machine. And a single operator can run several machines simultaneously.
All the pieces need to come together in a certain way, at a certain time.
Your customer only cares about getting what they want.
Either what they get from your company is:
- exactly what they need,
- exactly when they need it,
- for the price that they can afford,
. . . or it’s not.
And making all this happen requires so many moving pieces of your company, all coming together effectively . . . over and over and over again.
Just like an orchestra playing beautiful music.
So although technology gives greater leverage, the need to have all your people pulling together towards the end result hasn’t changed at all!
You may need fewer people to create the music than you did before, but the impact of each individual person is multiplied on the final result.
And if any one of these people is out of step or out-of-sync, the negative impact, the chaos caused by that individual is multiplied by technology.
So the “blessing” of technology, becomes a “curse.”
It seems you’re either on the pointy end of the sword or the handle end.
So I would argue that technology makes it even more important that our employees are focused on the final throughput and productivity we need.
People are just as important as they have ever been in improving productivity and have even greater leverage to do so.
So how does Gainsharing or Pay-for-Performance help with this?
One of the main advantages of a Gainsharing or proper pay-for-performance system is that it:
- focuses on the overall result or the overall performance of the system,
- gives feedback,
- includes a self correction mechanism, and
- ties people’s self-interest and pay to performance.
Each week:
- Gainsharing companies lay out a plan that clarifies the “final results” needed for the company to be beating its profit goals and to be “in the hunt” for a bonus.
- Each week this plan is broken down so that each part of the process can see what they need to do to be carrying their weight towards this overall goal or result.
- Each week a “post-mortem” is done to see how we did against the plan and “fixes” are put in place, so we don’t have these problems again.
- Additionally, people’s pay is tied to doing all this effectively and improving it week, by week, by week.
So people have a self-interest in making this a simple, effective system and following through on all the decisions they make to improve future performance.
Your Homework
Consider the following questions:
- How do people in your company get feedback about their performance producing the end results your customer cares about?
- How does your company go about fixing the problems within your company systems, so the same problems won’t be repeated in the future?
- How does people’s pay reflect Company performance or tie their self-interest to driving performance?
What actions should your Management Team take to address gaps you’ve identified?
