The need to improve productivity is crucial to competing with other developed countries. UK productivity still lags behind them, and the gap may be widening. The effects are everywhere from potholes to GP appointments. I have worked on productivity with British Steel and for a Dunlop company.
Embrace change
When I worked at British Steel we were still using machinery from before the second world war, some of it was reparations from Germany! Meanwhile Germany, and crucially Japan, were investing in new technology. At that time a single Japanese blast furnace was producing more than our four at Corby.
Sage, once the mainstay of UK accounting in SME’s, has fallen behind because its programs were written in an outdated programming language.
Apps on my phone can undertake tasks only dreamed of a few years ago. No doubt you use the latest SatNav. Is that reflected in the apps and programs used in your business? Or are you relying solely on software developed before the first wave of Covid?
Measure it
MacDonalds was founded on getting a hamburger into your hands faster than everyone else. One of our clients did the same, although their chips were microchips.
Almost anything can be done more quickly if there is focus. Unnecessary steps can be eliminated or reduced in number, movements can be symmetrical, pauses caused by critical paths can be utilised, etc. etc. But unless times are measured it is difficult to know the value. The stopwatch, or at least its electronic equivalents, is not yet out of time.
Trust those who do the job
There is an advantage in knowing the time needed to complete every aspect of a task. However, a worker may do the same task a thousand times, maybe tens of thousands of times in a career. Putting a twenty-year old (as I was) alongside them, to look at how to do it faster, may overlook the contribution the worker themselves could make. But trust, well being and fair reward are all important if you want your employees to share information that might be more to your advantage than to theirs.
Tackle the bad apples
The old adage is that leaving a bad apple in a bag of good ones makes them all go rotten. If one person in a team is not pulling their weight it demotivates the rest of the team.
It is rarely necessary to dismiss an employee for poor performance. But allowing poor performance or unsuitable behaviour to persist lowers productivity substantially. Colleagues notice. A formal warning for poor performance is a big event for employer and employee alike. It should not be considered until the employer’s expectations are clear to the employee. But I suggest formal warnings should never be avoided when they are appropriate. In my experience, 90% of misconduct “disappears” after the first formal warning. Amazingly I cannot recall a disciplinary process that has gone through the whole process from first warning to dismissal. The employee tends to reform or leave. Warning an employee should be private but that can be difficult. The employee invariably divulges it directly or indirectly. That can send a clear message to others and remotivate those who may have been frustrated by their colleagues’ behaviour.
Fair reward
It is understandable that any employee may be reluctant to improve their productivity simply to “line the pockets” of their employer.
So, the “three thirds” rule is one option for avoiding this concern. We used it at British Steel and again at my Dunlop employer. It means that for every productivity improvement, one third of the financial benefits goes to the shareholder(s), one third to investment in the future and one third to the employees.
Bonus schemes in various guises are a good process for feeding benefits down. From individual bonuses (e.g. commission) to company bonuses (e.g. profit sharing) they help to create fairer reward. They need to be designed with care, however.
Finally
I submit that improving productivity will, for your workforce, lead to higher living standards and ultimately for the nation, more effective public services.
Malcolm Martin FCIPD
Author Human Resource Practice
Blogs are for general guidance and are not an authoritative statement of the law.