Gainsharing is quite different from Profit Sharing.

1. Power to Motivate Rank and File Employees

For motivation to work, there must be two basic elements present.

A. People Must Understand What To Do to Drive Performance.

One of the main differences between Gainsharing and Profit Sharing is that Gainsharing very directly spells out what people need to do to drive the gains. A Profit Sharing system pays out if the company beats the goals set to trigger the Profit Sharing payout, but it doesn’t tell people what they need to do to make the profits happen.

A Gainsharing system is very specific in telling people what needs to happen, both overall and in their specific area, if we are going to hit the targeted performance level. This intensive planning and feedback system is key to Gainsharing’s enduring power to drive employee and company performance.

Since the Profit Sharing bonuses just “happen” from time to time and people don’t know exactly what they did to make them happen, Profit Sharing becomes an “entitlement.” That is, an expected part of their compensation.

This is one of the main ironies of Profit Sharing. People often develop a Profit Sharing system because they want pay for performance and they do not want entitlement.

That is, they only want to pay if the performance is there. But a Profit Sharing system gives them the exact thing they do not want – a sense of entitlement.

Because people don’t understand the connection between what they do and profits, they feel entitled to the profit sharing. You don’t need to do anything particular to receive it. If you work here when it’s paid out, you receive it.

It’s like having snow fall on you if you live in Minnesota. You don’t need to do anything to make it happen. If you live there long enough, the snow will fall on you.

B. Employees Must Believe They Can Influence Profits or Overall Results.

With Profit Sharing, people may not believe that their efforts will actually influence performance. They may feel that “Sure we can work hard. But management will just go buy a new machine or some other major expenditure and that’s where our bonus will go.”

It’s not as though Profit Sharing is a bad option.

It can work well to motivate high-level management who can see how to drive the performance. They have the information and resources to “connect the dots” and make the profits happen.

It can also work well to fund retirement instruments, etc.

It’s just that Gainsharing is a much better tool to motivate rank and file employees.

2. Costs Included

Gainsharing focuses on the most important costs in a company’s financials. Profit Sharing includes the entire P&L.

You can’t focus on everything. It’s a contradiction.

3. Frequency of Feedback

Gainsharing systems usually provide weekly or monthly feedback. Many have planning systems that specify what needs to happen on a shift-by-shift basis. This frequent feedback allows them to make adjustments “during the game.”

4. Frequency of Payouts

Gainsharing systems typically have a (potential) payout on a monthly basis. Profit Sharing systems typically payout (potentially) on an annual basis. Of course, the more closely we tie the rewards to the performance, the greater the motivational impact of the rewards paid out.

In Conclusion

Gainsharing is a powerful motivator because (1) people know what they need to do to drive the gains, and (2) they see the “gains” varying with how well they actually do what they need to do to drive the gains. They see the cause-effect connection.

This connection is what makes Gainsharing work better than profit sharing in driving performance.

Profit Sharing is different, but effective in it’s own way.

It can be effective to motivate high-level executives, and fund retirement instruments. It is often used effectively in conjunction with Gainsharing.

The post Gainsharing vs Profit Sharing – How They’re Different appeared first on Gainsharing Inc..

An “entitlement” means that I have a right to something. I should get what I’m entitled to. There isn’t anything that I need to do.

The problem here though, is that your customers don’t give you any entitlements. We have to earn it, “bring it,” make it happen every single day.

So there’s an inherent train wreck here. Your employees expect more money for the same performance (or maybe even less) – and your customers expect the opposite! (More performance for less money.)

So you’re stuck in the middle.

Disengaged

If I’m an entitled employee, there’s no drama, no excitement to what I’m doing at work and what happens as a result.

Actions and rewards are disconnected. One doesn’t cause or is not linked to the other.

So I’m disengaged. How boring. There’s no life, or unpredictability there.

No heroics or use of ones special abilities, gifts, or talents.

We want people engaged in the fight, engaged in the mission, purpose, duty, of the company, and to fulfill the promise the company represents for its clients. They need to be part of “living the dream” or the idea that the company embodies.

We want people to love their job and their work. But why should I love my job when I’m entitled? My job isn’t a vehicle to a desired end. The result is already mine, so the job and all it entails is a huge inconvenience.

Engaged and entitled really are two ends of a continuum.

Drains Life

The enemy is all that entitlement represents. It drains the very life that your company needs and delivers to its clients.

Where there is entitlement, there is no fulfillment.

We also want people driving results. Why should I drive anything when I’m already entitled to it?

It’s already mine . . . so give it to me!

Pay-for-Performance Undercuts Entitlement

Having Gainsharing type pay-for-performance undercuts the conditions that entitlement needs to take root and grow. You have to plan in advance, make it happen, deal with the difficulties and somehow find a way to make the performance happen.

(1) Changes with Performance

Variable pay fights entitlement, because it changes with performance.

If you slack off, the results fade away. You shouldn’t expect anything just because of who you are or greater seniority. And you need to keep making it happen. When you stop “pedaling the bicycle,” you slow down.

(2) Understand “What Leads to What”

Entitlement takes root when people get things they like (rewards) and don’t clearly see the causal link to what they did to get them.

Year-end bonuses often have this problem.

That is, people may have received them for years. Over time, people begin to think of the bonus as part of their pay. They expect it. They feel entitled to it. Their sentiment becomes, “You don’t need to do anything special to get the bonus. You just need to be here when it happens.”

Like snow falling in Minneapolis in the winter.

You don’t need to cause it to happen. You just need to be there when it happens.

So your year-end bonus isn’t driving anything.

An effective pay-for-performance system like Gainsharing drives an increased understanding of “what leads to what.” Each shift, each week, management and workers put their plans together regarding what needs to happen to get to bonus level performance.

People are genuinely driven to figure out “what leads to what.” It becomes a seductive game. It pulls them in. They end up driving performance for it’s own sake. They drive performance because they want to. And then when the bonus comes, it increases the momentum to do it again.

Aligns Employee Mindset with Customers Expectations

Pay-for-performance aligns your employees with the expectations by your customers that you’ll “make it happen” every time.

Your Gainsharing pay-for-performance system is in alignment with the pay-for-performance realities your Company faces. Your customers pay you for the value they receive. Not for your efforts.

This drives greater focus on what your customers really want from you, and why they give you their business.

Your Homework

Do your current company systems foster an entitlement mentality?

Do people see the link between what they do and the rewards they receive? Or do they think of the performance more in terms of the hours they’ve put in (or years of seniority they have)?

List the areas where you think an entitlement attitude could arise in your Company.

Consider ways that you could establish true Gainsharing type pay-for-performance to link actions, desired results and rewards more directly.

The post Entitlement — It Just Ruins Everything appeared first on Gainsharing Inc..

They also want to reward people when performance is there, but avoid getting locked into high levels of guaranteed pay.

They believe bonus systems provide all of this.

Because they want a simple system where bonuses track with profits, they often choose profit-sharing.

They believe they have an effective incentive system.

The problem is
profit sharing isn’t an incentive system
and probably won’t incentivize their people . . . at all.

Why not?

Profit sharing typically involves distributing a portion of the profits to employees as a bonus, often at the end of the year. People don’t get much information throughout the year, except possibly some updates about the profit levels year to date and the prospects for a payout.

Why Doesn’t Profit Sharing Incentivize People?

Profit sharing doesn’t work well as an incentive, because typically:

(1) People don’t know what they did to create the profits, and

(2) They don’t know what they need to do today to “carry their weight” to earn a bonus.

Since they don’t see how their efforts had an impact on profits, it’s unlikely that bonus payouts will influence their future behavior.

Proactive vs Retrospective

Also, profit sharing shares the profits after they’ve occurred.

The focus is on the past—where you’ve been.

It’s like driving a car when you can only see out the rear window!

Imagine if you had one of those sun blocks on your windshield that people unfold to block the sun when their car is parked, and you had to drive forward, but could only see out the back window to guide your driving.

In contrast, an incentive system aims to influence future behavior. So you’re driving the car looking out the windshield.

Motivation Essentials

An effective incentive or gain sharing system has these features in common:

(1) People know what the goal or needed production is

(2) They know what they need to do to achieve their part of the goal

(3) They believe that their efforts will yield the results/impact they want

(4) They get monthly, weekly, perhaps daily feedback as they work towards their goal, and

(5) They have something important to them tied to being successful (bonuses, etc).

Although money is important, it’s not the only reward, or even the most important in many instances.

People want to see they’re making an important contribution, that they’re seen as “carrying their weight,” and are part of something bigger than themselves.

The real key to an effective gain sharing or incentive system is that it makes peoples’ work into “a game,” where they’re driving the results because it’s important to them personally.

When this happens, people drive the performance whether anyone is watching them or not, because they want to do it for themselves.

When we can make these deeper connections, the bonuses answer the question, “I see the company is doing better, but what do I get out of this?” The bonuses “close that circle.” And we’ve successfully motivated people on many levels.

It’s not as though profit sharing is bad or undesirable. Often companies will have both a gain sharing and profit sharing system. There’s not an inherent conflict between the two.

Profit sharing can be a very effective way to fund retirement vehicles. But it does not work well to motivate or incentivize employees.

Summary

So gain sharing and profit sharing may seem like they’re largely the same.

People often use the terms interchangeably and the confusion is understandable. For example:

(1) Both profit sharing and gain sharing pay bonuses
(2) Profits are “gains”
(3) Both have the term “sharing” in their names.

But profit sharing and gain sharing are very different in their ability to motivate, guide and drive performance.

The most important differences are that (1) a gain sharing system tells people what they need to do to drive the gains and (2) gives them “real time” feedback so they can adjust their efforts along the way.

Profit sharing shares the profits “after the fact,” but does little to guide performance.

Because there’s such a great disconnect between what people do and the profit sharing bonuses, profit sharing provides little or no incentive at all.

People don’t see the connection between what they do and the rewards they get.

This can lead to great disappointment since the company is paying significant bonuses but not getting the impact they were seeking.

Your Homework

Look at the “Motivation Essentials” listed above.

Are there parts of your company where you have these pieces in place, but other parts where you don’t?

What is your action plan to “bolster” weaknesses or fill in missing pieces?

Just one missing piece can ruin the outcome you’re looking for.

Just like if you were baking a cake and forgot to mix in the eggs . . . you won’t end up with a cake. It will be something else!

The post Why Profit Sharing Disappoints appeared first on Gainsharing Inc..

Our supervisors typically get very little training when they’re promoted to supervisor.

Often they’re no match for the ingenious, relentless efforts of slackers to avoid work of any kind.

We typically don’t do a good job setting supervisors up to be a success.

So, they’re left on their own to figure out what to do and how to get their people to perform.

This lack of clarity leaves supervisors in a fog.

Slackers flourish in this lack of clarity and accountability.

It’s what they look for.

The Gainsharing process can help here though, as it creates an environment that’s the opposite of what a slacker needs to flourish.

A big part of the Gainsharing process is:

1. Defining the overall performance needed to be “in the hunt” for a bonus, and then
2. Breaking it down into what has to happen in the the supervisor’s area, so they can see what they need to do to be “carrying their weight.”If we can help supervisors clarify and define what “good performance” looks like, this does several things:

Helps Supervisors Get Everyone on the Same Page

The Gainsharing process specifies what has to be accomplished overall and a given department’s part to be “carrying their weight” towards the overall goal.

Having the department’s part clearly defined allows the supervisor to get their people “signed up”, and pulling in the same direction.

Provides Structure for Regular Feedback

Once supervisors have a clear goal, it’s easier to give people immediate, objective, “on the spot” feedback and adjust what they’re doing.

A slacker wants to avoid work or effort. They’ll do anything they can to avoid doing work.

All this visibility makes it more difficult for slackers to “hide in the shadows” and just put in the minimum.

It brings them out into the sunlight.

The slackers’ avoidance of work is the enemy we want to avoid/eliminate.

Slackers will find it easier to just go work at another company, than to endure the visibility and accountability Gainsharing-type companies have.

Make Their Work a Game

Having clear objectives for the day and immediate feedback goes a long way towards making their work more like a game.

If we can make a person’s daily work more like a game, they’ll drive results because it’s important to them personally.

The keys here are giving clear objectives and timely feedback. Great performers (sport, music, business) are skilled at making their work into a game.

Putting the structure in place provides the basics needed for the people to see their work as a game and take delight in achieving all the small goals on the way to the overall goal.

The more we can get these dynamics in place, the better company performance will be.

Two Wolves

Truth be told, I believe there’s a bit of the slacker in all of us.

This reminds me of the Indian story about the two wolves:

An old Cherokee is teaching his grandson about life. “A fight is going on inside me,” he said to the boy. “It is a terrible fight and it is between two wolves. One is evil – he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.”

He continued, “The other is good – he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith. The same fight is going on inside you – and inside every other person, too.”

The grandson thought about it for a minute and then asked his grandfather, “Which wolf will win?”

The old Cherokee simply replied, “The one you feed.”

Summary

We set up our supervisors for success by giving them clarity on the overall target, and the part they’re accountable for.

This makes it much more straightforward for them to: (1) communicate, (2) give objective feedback, and (3) hold people accountable.

This is exactly the kind of clear accountability that a slacker wants to avoid.

And these same structures improve performance from your “winner employees.”

Your Homework

Anything we can do to give supervisors more clarity will “reduce the fog” and help them deal with slackers.

Below are some questions to consider:

• Where in your company do you suspect you have slackers working?
• Do these areas have specific, daily clarity on expected results?
• If I went to the workers in the area and asked them at the end of the day what was expected of them that day and how they did on that, would they know?
• If people everywhere in your company knew what was expected of them that day and where they stood on that, would it make a difference in your overall results?
• Would it make it more difficult for slackers to hide in the shadows and just put in the minimum?
• How can you put more of the structures in place that give supervisors the clarity they need?

The post How Can We Help Supervisors Deal with Slackers?​​​​​​​ appeared first on Gainsharing Inc..

Let me get right to the point . . .

People do what they do to get what they want.

We see what motivates a person by looking at how they use their time and other resources. Examine what someone does and you see what motivates them.

So let’s talk about motivation in the workplace.

One of the easiest ways to quickly get to the basics of motivating people at work with incentives is to think of someone operating a vending machine.

There are several basics in play:

(1) There has to be something in the vending machine that the person wants.

(2) They need to believe they understand how to operate the machine.

(3) They need to believe the machine works.

(4) There needs to be feedback, so the person can tell if the machine is working.

(5) The person needs to get into action (put the money in, push the buttons, etc.).

(6) They need to actually get what they want. The vending machine needs to work.

Let’s look at how this translates to the workplace:

(1) There has to be something in the vending machine that the person wants.

People want a long list of things from their work: self-esteem, play and win the game, show they’re carrying their weight, etc., oh . . . and money!

Money answers the question “I see the company is doing better when we all perform better. But what do I get out of this?”

Money is an essential part of motivation at work. It’s a “must have”.

But it’s only one of many things people want from their work. This is good, because momentum towards performance builds, as the different rewards stack up on one another. The more things a person gets from their work, the “more solid” their motivation.

(2) They need to believe they understand how to operate the machine.

The biggest mistake companies make in trying to motivate their people with incentives is they don’t tell them specifically what they need to do to earn their targeted bonus.

They may tell them in general. But people need to know specifically, what they need to do today, to be carrying their weight towards the bonus.

Without the specifics, they’re “in a fog”.

They’re lost.

When they have the specifics, they can “tear into” problem solving. They can make sure they are keeping things on track.

Everything becomes much more simple, clear and straightforward when they have specifics.

It changes everything.

(3) They need to believe the machine works.

People need to understand how their pay-for-performance system works. If they don’t understand it, it won’t be effective.

They also need to believe that if they do their part, as they understand it, the system will work and they’ll get their bonus.

(4) There needs to be feedback so the person can tell if the machine is working.

They need feedback so they can see if things are coming together overall, and also they need to know how the individual parts are doing that make up the whole.

It’s about driving the overall performance and making this like a game that they’re playing to win.

The feedback shows them their progress. It’s very important to motivation to see that their efforts are making a difference and to guide their own efforts to get what they want.

(5) The person needs to get into action (put the money in, push the buttons, etc.).

Motivation is really about taking action. It’s about making things happen.

Enthusiasm, focus, etc. without action doesn’t really do anything. Aspirations and intentions don’t really count.

We need to take action to get results!

We do need to think, plan, focus, etc. But we also need to be sure that this leads to action!

(6) They need to actually get what they want. The vending machine needs to work.

To complete the motivation cycle, people need to get what they wanted at the outset.

When this happens, the whole motivation process is reinforced and is more likely to happen again.

Their success, the bonuses, act “like a flywheel.” They increase their momentum to try again with even more confidence and gusto than before.

Your Homework

If you have an area where you want to influence your employees’ motivation, think about it from this vending machine analogy.

• Do you have each of the steps in place?

I strongly encourage you to go ask your people to confirm you have the necessary conditions in place.

You may think that your people understand specifically what they need to do today to be carrying their weight towards their bonus. But if they don’t actually know, it’s a major failure.

You’ve lost most of your motivation right there.

Put the conditions in place, and you’ll have the motivation you want.

The post How to Motivate with Incentives appeared first on Gainsharing Inc..

Without focus, without specific action plans, your improvement efforts will fizzle and die.

Managers might try to motivate people by saying something like “If we have a five percent productivity improvement this month, then we will have a shot a bonus. We have the work, the materials, the people, so let’s go make it happen!”

But exactly how are we going to drive the gains? We can’t improve in general. We can only improve by making specific changes.

We’ve got to be specific in terms of the problems, and who is going to what, by when to fix them.

For example, a manager might show the efficiencies in an area and discuss how we need to improve them. They ask, “What should we do to improve these numbers?” But they don’t breakdown the gap between where they are and where they need to be.

Let’s say, (for example) that we have 65% efficiency, which means we have 16 hours of lost time. Three hours might come from set-ups taking longer than planned. So what specifically are we going to do to reduce set-up time? Who is going to do what, by when? How will we check to see that the fix(s) worked?

Wimpy analysis & plan gives wimpy results

And where does the other time go? What should we do to find out where the time is going? How do we divide up the time once we get data to answer this question and put action plans in place to address these issues? How are we going to follow up and see if the fixes worked?

We have to define what “good” looks like. Then aggressively go after achieving it. If we’re not specific about where we want to be, we can’t aggressively attack the gap between here and there.

“If you don’t know where you’re going, you’ll end up somewhere else.”
~ Yogi Berra

(2) Bonuses Don’t Track with Profits

THE MOST IMPORTANT ISSUE in designing a Gainsharing Formula is that profits track with bonuses. The Gainsharing results should mirror and predict financial performance.

That is, if we are not “in the hunt” for a bonus, based on the Gainsharing information, we probably will not have the financial results we want either.

It’s essential for Gainsharing to be self-funding, but also for the Gainsharing information to have the appropriate urgency. If we’re not on track to get a bonus, it’s not an issue of “well, we’ll see how things turn out in the next Gainsharing period.”

Gainsharing results are like the information from the instruments in an airplane. If you are losing altitude, that has it’s own urgency!

Similarly, the Gainsharing results tell us how we are doing operationally and financially. They track with results that are imperative beyond Gainsharing.

(3) Time Frame is Too Long

Psychology has proven that the closer the link between an action and a reward, the greater the influence on future behavior. This is a consistent, predictable “law” of nature, like the “law” of gravity. If a reward is delayed, the impact is diminished or lost.

More than 90% of Gainsharing Systems are set up on monthly periods.

Quarterly Gainsharing periods stretch the link between performance and rewards, and make it much more difficult to maintain positive momentum.

It’s not that quarterly periods can’t work. They just make things more difficult, reduce motivation, and the likelihood of success.

Usually, the desire to have a longer Gainsharing period comes from the fear that the Gainsharing performance (or bonuses) don’t track with profits. So if that part of the formula design is handled correctly, the need for longer Gainsharing periods goes away.

The post Three Biggest Mistakes People Make Implementing Gainsharing appeared first on Gainsharing Inc..

If it’s the truth, we shouldn’t shy away from showing it.

Giving feedback is essential to managing performance and making work more like a game.

Accountability – Visibility

Your good performers want their numbers shown. Your worst performers are hiding behind their knowledge that you won’t show individual performance numbers.

If they thought their numbers would be shown in the bright light of day, they’d make sure the numbers (their performance) didn’t look so bad. But being that they’re confident that you won’t single them out in public, they don’t worry about it.

You think they would be upset if you show the numbers, but actually they’re upset that you don’t.

Bring on the Danger

It’s boring not knowing how they’re doing.

People need some danger, some unpredictability in their lives to keep things exciting. They want to be treated like adults. They want to be treated like they can handle the truth. Not some watered down version that doesn’t reflect reality.

“He that is good for making excuses is seldom good for anything else.”
— Benjamin Franklin

Your best workers want accountability and visibility. Your worst workers don’t.

If you thought that your worst workers would probably try and find some other place to work where they can do the minimum and lurk in the darkness if you insisted on accountability and visibility, that alone might convince you to pursue it in a big way. Right?

Posting Numbers and Taking Names

Personally, I’m in favor of providing the names with the performance numbers.

Everyone knows who is high and low on the performance list already!
They already know. Not showing the data doesn’t conceal anything. It doesn’t make anything better, and makes many things worse.

When we show the performance numbers and focus on the gap between where we are and need to be, it brings the system problems to the surface – which is the source of most of our problems.

–> “I can’t hit my numbers because my supervisor doesn’t give me my work instructions until 40 minutes into my shift.”

–> “I need to search for parts before I can start working.”

–> “I have to grind an 18th inch off the part because they aren’t fabbed right and won’t fit together or don’t match the print.”

When I pressure the workers, I finally get down to the repetitive issues that need to be fixed before we can hit the productivity numbers.

Here is the kicker – without the data and the pressure to hit the numbers, these issues don’t get out into the “bright light of day”.

People just live with them, muddle through them, accommodate them . . . and that’s where your profits are, that’s where their bonuses go, that’s how your competition underbids you and steals your customers . . . and it’s such a simple thing really!

Driving Accountability

Companies with Gainsharing systems specify the performance needed to “be in the hunt” for a bonus at the end of the month. The needed performance (the “Plan”) is calculated (for the week, day, and shift). Performance is broken down in terms of “what is and isn’t happening” in terms of performance against the “Plan.”

Their Gainsharing process puts a discipline to this, so it happens week in and week out – without fail.

This analysis, accountability, visibility, and the fixes we put in place are the main engine that drives the gains.

But, this starts with an emphasis on visibility and accountability. Once we have this, the performance improvements start almost as if by magic.

We may think we’re doing the right thing not showing the numbers. But your employees/colleagues would probably prefer that we brought the truth out into the “bright light of day” and put teeth into making performance happen.

So, tell the truth, and let “the gains begin.”

Your Assignment

(1) Select a type of performance that you would like to highlight or improve. I suggest you consider the following question “What one area of performance, if we could truly achieve excellence, would provide the the greatest positive impact on our overall Company performance?”

(2) Give the measurements of performance in this area strong, public visibility. No hiding. No excuses.

(3) Get the appropriate people together (you and your colleagues decide who that is) and have a focused discussion regarding what the performance numbers are telling us.

(4) Develop action plans or “fixes” to the issues the group deems to be “highest leverage.”

(5) Build a review of performance, progress and a way to renew the improvement process into your regular performance review disciplines. For example, incorporate these measures into the information that your management Team reviews monthly, etc.

Every time I’ve done this simple process, I’ve had great results. Give it a try and you’ll be impressed by the “fire” and enthusiasm that emerges comes from your peoples’ desire for truth, accountability, visibility, and “getting into the fight.”

The post Accountability – Visibility | All Progress Starts by Telling the Truth appeared first on Gainsharing Inc..

They’re thrust into difficult situations with little or no training.

Supervisors want to do well, but aren’t exactly sure what to do.

Like military people, they need to make decisions and lead others to make the right things happen.

As a Marine rifle platoon leader and company commander in Vietnam, Fred Smith, FedEx Corporation Chairman, President, and CEO, learned important basic leadership lessons.

A young Marine lieutenant told him,

“To be an effective Marine you must do three things:

You gotta shoot.
You gotta move.
And you gotta communicate!”

Our supervisors “lead the charge” every day on the “front line” in our companies.

This “shoot, move, communicate” message applies to them too.

Shooting

Like military personnel, supervisors need to find “problems” and “neutralize them” as they say in military parlance.

They need to take calculated risks, and be proactive and decisive.

Also, like military shooting, supervisors need to aim actions carefully. We need focused action; time is precious in both situations.

Movement

Like military leaders, supervisors and their people must get into motion!

It’s not enough just to think and plan.

Planning’s important, but we can’t get into an “analysis paralysis” and not move and take action.

Results come from action.

We need to plan the movements we’re going to take, the objectives to achieve, and specifically what needs to be done today.

Then, we need to “shoot” and “pick off” the items on the “to-do” list.

Communication

It’s not enough just to tell somebody to move, especially when you’re working together as a team.

Which leads us to communication.

The real power with communication is coordination. The ability to achieve a “force multiplier” effect as they say in the military.

Communication not only drives clarity on “who’s doing what, by when,” but allows supervisors to adjust and coordinate as things unfold.

So What Can We Do To Set Our Supervisors Up For Success?

The military provides a good model here in terms of how to provide the framework people need.

In many companies, Gainsharing provides this framework and the following benefits:

1. Each week, an overall plan for the week is developed that shows the performance necessary to earn a bonus. This plan is broken down to clarify what needs to happen each day for a given area to be “carrying its weight” towards the big goal.
2. Gainsharing provides feedback systems in the workers’ areas so they can see how they are doing as they progress towards the goal for the day and the week.
3. It gives them mechanisms to spotlight problems and put fixes in place.
4. Gainsharing also gives them an overall communication so they can see the “big picture,” their piece of that and how it all is coming together as they move through the day, week and month.

This framework simplifies the supervisors’ task of “shoot, move and communicate.”

It clarifies the targets.

It gives a way to eliminate problems as they show up.

All this allows them to adjust “on the move” as things change in real-time.

Without a Framework

Without the framework, things are much more difficult to communicate and coordinate.

People need to know what to “shoot at,” what to aim for.

You can’t hit a target you can’t see.

So when we lay out what a given supervisor is accountable to achieve on a given day, it gives clarity to the targets and the movement we need to “carry our weight” towards the overall bonus goal.

Without a common framework, all the supervisors and workers are going about things their own way, which leads to endless chaos.

This chaos is the enemy we’re trying to avoid/elmiminate.

The framework also allows supervisors to keep score and give feedback to people so they see their progress as they sweat and hustle towards the goal.

Summary

In both business and the battlefield, leaders need to make things happen.

They need to get our people to move, take initiative, be decisive, and coordinate together.

Leaders need to translate a complex situation into a simple message.

They need to both communicate the big picture and answer the individual worker’s or soldier’s question, “So, what do you want me to do?”

To properly set our supervisors up for success, we need to give them a framework that streamlines and simplifies this task.

Then they can confidently take action, with everybody on the same page, at the same time, moving in the same direction . . .

and “shoot, move and communicate!”

The post Like Marines, Supervisors need to “Shoot, Move, and Communicate” appeared first on Gainsharing Inc..

• 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:

1. focuses on the overall result or the overall performance of the system,
2. gives feedback,
3. includes a self correction mechanism, and
4. 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:

1. How do people in your company get feedback about their performance producing the end results your customer cares about?
   
   
2. How does your company go about fixing the problems within your company systems, so the same problems won’t be repeated in the future?
   
   
3. 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?

The post Which is the Key to Productivity? – People or Technology appeared first on Gainsharing Inc..

How do you keep the spark alive in a Gainsharing System or other pay-for-performance program? That’s a question that I’ve been asked many times over the years.

A client recently sent me that question after they paid a record Gainsharing bonus. He said his employees had “really embraced the Gainsharing concept” and wanted to be sure that they maintained the high level of “buy in” they’ve achieved.

So how do we keep the “spark” alive?

When we say we want people to get more involved, the question that occurs to me is “Involved in what?” Well, doing their jobs (of course). But also getting involved in the challenges of the business and all of the things the business is trying to achieve (growth, giving customers what they want, etc.)

The key to getting peoples’ involvement and keeping that involvement over time comes from being direct about:
(1) their goals and the goals of the company,
(2) how they are doing in terms of those goals,
(3) problems we are having,
(4) solutions to those problems, and
(5) how we are progressing from where we are to where we need to be.

People want direct, useful information. They want leaders to lead, in a confident, straightforward manner.

People know what the problems are. They live with the problems. They want to see that management sees the problems too and has a plan to do something about them. When they see that management is following through with action to eliminate the problems, credibility begins to accumulate.

Keep them in the fight

People will “stay with” management emotionally, and stay “in the fight” for a long time when they see followthrough and progress made toward the goals.

Hourly production goals (for example expected production in an area by hour) and performance against these goals, are an excellent way to “get into” this type of data and performance analysis.

Lean Manufacturing

Many companies using Lean Manufacturing, use a technique called “By the day, By the hour”. The scheduled production for the day is broken down to the hourly performance necessary to achieve the production for the day. I’m a strong advocate of posting these type of hourly goals and performance against those goals right in the production area so every employee can see where they should be versus where they really are.

If we don’t give people this information, how can they know? How do we expect them to hit their goals for the week, etc. when they don’t know where they are (versus the goals) at any given time during the week. If they don’t know, it’s our (management’s) fault.

This type of data is critical to problem solving and provides the straightforward information people need to stay on track with their goals. Without “in their face” feedback, things lose momentum.

The “buy-in,” and positive momentum comes from seeing management “walk the talk” in terms of setting the goals and following through. This makes believers. When people finally get a few bonuses, the forward momentum is solidified.

Connecting to the Plan

People need management to “connect the dots” for them. What’s the plan? And how are we going to get there?

In the beginning, you (management) know your plan, can see what you want to do, and how you’re going to do it. Once you’re underway, providing feedback, and follow through, EMPLOYEES SEE IT TOO. This is how you get their involvement or buy in.

This is the hard thing about “vision” in a company. First it exists in the mind of an individual. We have to forcefully “get it out there!” Out into the open and the minds of the whole workforce.

Sun Tzu, in “The Art of War”, says that “He will win whose army is animated by the same spirit throughout all its ranks.”

So, how do we keep the spark alive?

Management must show the people:
(1) where we are,
(2) where we need to be,
(3) how we are going to get there,
(4) that Management sees the problems (that the people also see), and
(5) that they are following through with plans to fix the problems.

When we do these things, the spark stays alive . . . and we keep moving forward.

This process can be very rewarding, but the greatest reward come from having a focused, effective, competitive business – with employees whose pay is tied to and driven by their own excellent performance.

The post How to Keep the Spark Alive: Long-Term Pay-For-Performance Success appeared first on Gainsharing Inc..