I am the ops manager of a small shop based in OK. I've recently been troubled with how to incentivize workers that are not necessarily tied to a sales position. While it's easy to incentivize our estimators, I can't figure out ways to do the same for our production line. I've thought of profit sharing for the shop workers, but we aren't quite big enough for that yet. Any ideas that won't necessarily lose us money?
"I can't figure out ways to do the same for our production line."
That is your answer, don't do it, the trade offs are a net liability. Just the cost to administer it are huge.
"Efficiency experts" will say that you are better off making a better work environment.
Lean seems to offer more value on this subject.
Jerry Metz (from the wood and wood products magazine) used to say just bonus the foreman in such a way that he could not game the system.
If you bonus and have a down period it will become a disincentive and morale breaker.
IMO from seeing posts on the wood web the endorsements verses the don't do its indicate the don't do its are in the vast majority.
My favorite sad story on this is some friends who had a uniform sewing operation (in the US). In the 90s they bought a Gerber mover for about 250k IIRC. A huge effort was made to make it work and it did cept one thing. The seamsters figured how to game the system to get a larger bonus for years before my friends caught on. These guys are not stupid. Last I heard they pitched the whole thing.
OTOH Bezos seems to be making robots work well for his system.
IMO technology is a good bet, incentives not so much.
I have people whoís pay is partially based on volume we install, works out to about 5% of their pay. No downside on it, if we install 50k in a week they get x amount. I originally planned on rating jobs and pulling amounts from it if we had screw ups. I abandoned that idea as it pitted people against one another and created a culture of blame instead of one of unity. We know have daily production meetings and weekly all employee meetings where we discuss problem issues and things that are going good. We discuss how much $ is not collected and why we havenít been paid. When I started talking about it we had over $70k in uncollected. Our last meeting we had $3500.
I added a little spiff a couple months back, a snack program, $25 per employee per month. Make a list what you want and Iíll stock it. You wonít believe the clandestine program they were setting up and how much bs had become involved in it! When I caught wind of it I was able to put a stop to it before it got out of hand. You will be surprised how much effort they can put into something.
Build a great place to work and pay them well
In my experience paying people a decent wage is one of the best motivators. If you are paying people less than $19/hr, there is no magic bullet to make them forget that they are living bellow the poverty level.
If employees see the success of the company as their path to success, they will buy in to making it work. When I was an employee, the people in the shop that wanted stability and job security wanted the company to succeed, and contributed accordingly. On your part, having a viable business plan, and making it known, assures employees that they can be successful if you are. The employees need to be people that see your shop as a place where they can have a decent place to work, and bring home money and health insurance. Your vision is paramount. Having employees that will buy in also has to happen.
I have found engagement to be the easiest way to incentivize people. Hold regular (short) meetings to keep them up abreast of goals and expectations. Give them the freedom to suggest and implement process change and improvement that will make them better/faster/more efficient in their work. The guy on the pointy end will have a better idea of what he needs than you will. Instead of it being your job to tell them what to do, make your job ensuring they have what they need. Watch some of Paul Akers' videos, he's the guru of this.
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