|Enhancing Productivity Using Custom Software|
A service company we worked with needed to control payroll cost. But they also wanted to improve employee productivity and morale at the same time. Management was well aware of complaints by several key employees, who felt their teammates weren't carrying their weight. Since all employees were being paid an hourly wage, less-motivated employees had no incentive to pick up the pace. In fact, the opposite was true--if they managed to stretch their workweek out to more than 40 hours, they'd collect overtime pay.
Naturally, the business owners had different ideas. They could ill afford taking the time to drive from job site to job site, checking up on employees every day. So they sat down and brainstormed for better solutions. "What if we pay for performance?" They wondered. "What would that look like?"
Here's a summary of the formula they arrived at:
Thus, management could allocate pay to individual employees more equitably. If a two-man team spent nine hours performing X units of work, but one of the team members contributed only 30%, his pay for that day would plummet close to minimum wage. But employees who completed more work in fewer hours would earn a much higher hourly wage. Plus, they'd be free to leave when they finished their assigned workload.
But the plan didn't stop there. It also included an additional bonus--paid out at the end of each pay period. Every service worker would qualify for the full bonus at the beginning of the pay period. But the bonus would decrease whenever an employee was late for work, received customer complaints, or failed to bring his/her equipment back to the shop at the end of the day.
While this approached looked good on paper, how could it be implemented in the real world? Tracking all the data elements manually was out of the question. Even using a spreadsheet would be difficult, because of the number of variables going into it. It didn't take long to conclude that custom software would be the best long-term solution. So we worked with the company to develop a software application tailored to their unique needs.
Now that it has moved into production, there has been a dramatic, measurable increase in productivity. Since implementation, there has been a 19% reduction in overtime, and a 31% reduction in trips back to jobsites for rework or to fetch forgotten equipment.
Frankly, not all employees were thrilled by the changes. In fact, some became so dissatisfied that they no longer work for the company. But top-performers appreciate being able to log into the software and check their earnings every day. They realize they can potentially double their hourly wage while reducing their time at work, and are self-motivated to encourage their teammates.
And management is very pleased.