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A new hotel employee was asked to clean the elevators and report to the supervisor when the task was complete. When the employee didn’t show up at the end of the day, the supervisor assumed that, like many others, he just didn’t like the job and left. However, after four days, the supervisor ran into the new employee. He was cleaning in one of the elevators. “Surely you haven’t been cleaning these elevators for four days, have you?” the supervisor asked, accusingly. “Yes sir,” said the clerk, “This is a big job and I’m not done yet, do you realize there are over forty of them, two on each floor, and sometimes they’re not even there…”
The story may be familiar to some. However, the main message is that proper training in an unfamiliar environment is essential. Warehouses and distribution centers pay a lot of attention to management training – they are looking for the brightest, most talented and experienced person available. However, when it comes to hiring the staff of people who are actually going to do the work, they get someone with minimal education and work experience. Most companies hire hourly workers who may have been at multiple companies in the past and assimilate them into their organization right away, becoming familiar with the operation as they go or, in some cases, not at all.
The problem with this approach is that the company gains perhaps a few months of employee productivity before the effects of lack of proper training and experience begin to show. If the situation persists, it can lead to many challenges, from inventory accuracy to audits, not to mention lost revenue for the company and the repeated cycle of firing the employee and making the same mistake again with a new hire.
Most of the new employees in the warehouse come from other organizations or temporary services and, after a few days on the job, they practice the clothes of the old company to receive, store, pick and move products. But not all companies are created equal and while you may want them to perform differently if you haven’t trained them on your company culture and processes or worse, they come in with a lack of experience, they usually they learn from others who may not. be the right path if you want to have quality workmanship.
Lack of training and experience
Poor training and experience can have an adverse effect on your organization. Traveling the world, I’ve noticed many excuses as to why organizations can’t properly train their hourly workers. Some were, for example, “if I train them, they will leave and take the training somewhere else.” Or “we don’t have the budget for company formation.” But the question is: can you afford not to train them? According to recent statistics, the average business experiences a minimum of 1.6 hours of downtime per week (ie reduced production, maintenance delays, outages, and inaccurate data collection). To put it into a more proper perspective, a distribution center with 50 employees who are paid $29 per hour ($15 per hour salary + $14 per hour in benefits), the cost of downtime for that company it would be $9,280 per week, which translates to more than $110,000 per year. .
This under the assumption that all company workers will be forced to stop all production during a downtime scenario that may not happen, but just a few key distribution workers on the docks could create a severe impact on production. operation. But before you can assess the cost of downtime, you need to determine its source. The best way to accomplish this is to do a downtime threat scan. Some threats that could cause downtime,
1. Internal and external sources
• Technological
• Accidental versus intentional
• Controllable risk or outside the control of the organization
• Events with prior notice versus those without notice
• Employee sick leave
• Absenteeism
• Skilled versus unskilled workers
2. Three questions to focus on when conducting a threat analysis.
• Identify relevant compliance issues
• Establish a cost associated with each compliance issue
• Develop processes to review downtime threats on an ongoing basis.
The benefits of training and experience
Having skilled and dedicated workers at lower levels is good business practice and makes sense. Empirical evidence shows a significant correlation between experience and compensation (see Robert Willis 1986 and Theresa Devine and Nicholas Kiefer 1991 for surveys). Furthermore, on-the-job training, apprenticeships, and internships provide experience at significant costs to both individuals and organizations: Sherwin Rosen (1972: p327) states: “(w) workers demand learning opportunities and are willing to pay for them from birth”. marketable skills or knowledge and subsequent income are increased.
The importance of the experience and training of your employees can provide more than compensation, it can save time for the organization; workers have a more positive feeling about the organization, they are off to a good start and they know what they are doing.
Experience and training add value to your organization and employers recognize that the values these employees bring translate into;
• Higher earnings
• Reduced costs
• Higher quality, and
• Increased customer satisfaction
Heymann and Barrera (2010) exemplified employee values in their study in which they interviewed employees at all levels, from the lowest paid to those in top management positions, including CEOs, CFOs, and COOs at nine different countries. The companies had between 27 and 126,000 employees and included public and private sector companies in the automobile, financial services, personal property, technology hardware and equipment, pharmaceuticals, food production, building materials, and industrial metals.
They found that companies like Costco and Great Little Box Company, because of the incentives they offered from the lowest level employee to top management, had happier, more productive employees and a lower turnover rate than their competitors in the same industry. They also found that treating workers well was important to Costco, as it led to higher motivation and better quality of service. This combination, along with good pay and the knowledge that there were opportunities for advancement, were strong incentives for employees to work hard. The high quality of service provided by motivated and committed employees at Costco, coupled with low prices, meant that customers came back and were willing to pay membership dues.
Great Little Box Company practiced an open book management strategy (holding monthly meetings to discuss organizations, finances, production, and sales performance with staff members at all levels) that gave employees a sense of ownership. property in the company still in or to be more effective. the organization’s leadership incorporated profit sharing. The Great Little Box Company also encouraged employees to come up with cost-saving ideas. One such idea resulted in the interdepartmental use of a particular piece of equipment that is used exclusively in the labeling department, but is now shared with the department in charge of printing folding cartons, resulting in a cost savings of 12%, a task that was outsourced to a printing company in the past.
Employee engagement ideas and strategies are nothing new, we have seen programs like TQM, Quality Circles and Agile all emphasize the same thing but unlike The Great Little Box Company who actually implemented and followed through; it was just another buzzword that died out when the next big wave of pop management techniques came along.
The open book management strategy has served The Great Little Box Company well in terms of profits and substantial gains. In the last decade its sales have doubled from 17 to 35 million and in the last seven years the success of the company has allowed it to buy the assets of six companies.
Zenger, Folkman & Edinger (2010) concluded in their study of companies that were profitable. They identified five areas that were common among companies with substantial growth.
1. Employee satisfaction/engagement
2. Employee turnover
3. Percentage of employees who think about quitting
4. Satisfaction with payment
5. High engagement
Zenger, Folkman, and Edinger’s (2010) study, while not inclusive, makes a strong case that employee experience, training, and engagement are essential to a company’s growth and profitability. Costco and Great Little Box Company are two good examples of companies that are successful with company experience, training, and involvement at all levels, but it’s not the exact rule of thumb. Incentives and participation are noteworthy factors, but to come up with great ideas that save organizations money, there needs to be some experience and training among staff at every level.
Achieving the kind of success that Costco and The Great Little Box Company have achieved; companies need to find what works for them and how it relates to company goals. Don’t follow other organizations or emulate their operating systems because every company is different and it doesn’t necessarily translate into success for your company.
References
Heymann, J. and Barrera, M. (2010). How companies can benefit from increasing compensation at the bottom. Ivey Business Journal, December 2010.
Rosen, S. (1972). “Learning and experience in the labor market”, The Journal of Human Resources, 1972, 7. pp. 326-342.
Zenger, J., Folkman, J. and Edinger,.K. (2010). How Extraordinary Leaders Double Earnings:
Decoding leadership trends to uncover patterns.