Smart manufacturers would never operate in a place where the supply chain was uncertain. That’s simply good business sense. Yet many companies operate without a sufficient supply of their most critical resource: high-quality workers.
Disinterested, disengaged employees who view their jobs as a distasteful necessity put the health of the company at risk. Smart companies, on the other hand, know that a solid foundation of engaged employees is the single best starting point for building and growing a business. Unfortunately for many manufacturers, employee engagement is low today. Gallup’s 2012 Employee Engagement Index found that less than one in four manufacturing employees are engaged.
Building employee engagement, a management trend that crosses all industries today, involves motivating people in a way that ensures the employees have a vested interest in helping the business attain its organizational goals. It means de-emphasizing the traditional “cascade structure” in which strategy is created at the top and expected to trickle down.
Research confirms the success of the engaged employee model. The Gallup analysis found that highly engaged manufacturing employees can boost productivity by an average of 19 percent and safety by 62 percent compared to poorly engaged employees. High engagement was strongly correlated with employee retention, drastically reducing turnover, and 27 percent less absenteeism. A study conducted by Development Dimensions International (DDI) of a Fortune 100 manufacturing company found that quality errors (as measured by external and internal parts per million) stood at 5,658 for low-engagement groups of employees and only 52 for high-engagement groups.
Thomas McCoy, director of the Employee Engagement Institute (EEI), told IMT that a solid engagement system is essentially a powerful leadership development process.
“A good engagement system will develop focus, understanding, commitment and accountability on the part of all employees,” said McCoy.
At the crux of most successful employee engagement programs is an effective performance evaluation system, often software-based, which builds this understanding and accountability into a worker’s individual goals. While most companies engage in some kind of performance evaluation, companies with the most highly engaged employees have some best practices in common.
1. Make it about career development. Rather than focusing on past performance, align the evaluation more closely to the employee’s career development and future. While previous performance shouldn’t be ignored, if employees feel that the evaluations are a real tool to help them advance or earn raises, they will be better motivated. It’s simply a human trait to be more motivated when there’s “something in it for me.”
2. Build real goals. The corporate world suffers from an overabundance of meaningless PR language. Employee evaluations aren’t the place for it. Avoid nebulous directives like “be more efficient.” Set actual goals using direct language and be sure employees understand them. Ask employees if they have any specific goals of their own, such as learning a new skill or achieving a certain certification, and make them part of the evaluation.
3. Set metrics. As the old saying goes, if you can’t measure it, you can’t manage it, so manufacturing employee evaluations should measure concrete goals such as safety, productivity, error reduction, machinery maintenance, and resource use.
4. Customization. Many performance evaluation solutions are built with sales teams in mind. Ensure that any solution that will be used in a manufacturing setting is customizable for industry-specific goals such as safety practices, process efficiency, certification, and equipment knowledge.
5. Make it easy to use and intuitive. Many enterprise solutions suffer from an overabundance of features and a level of complexity that lead to low adoption rates. While training may be necessary to some extent, using a system that is intuitive and visual — point-and-click is ideal — will ensure managers use it.
6. Evaluate managers on employee engagement. Some managers will be more effective than others at building an engaged workforce. Use this as a criterion in managers’ own performance evaluations. Managers who can’t boost the engagement of employees may not be right for the organization.
7. Do it regularly. The traditional performance evaluation model is an annual one. This leaves room for surprises: employees confident of a good review become resentful when issues they were unaware of are sprung on them. Problems raised annually may be too entrenched to fix. By evaluating quarterly or even monthly, employees and managers can align their expectations more closely, surprises are eliminated and goals are more likely to be reached.
Louis Posthauer, vice president of sales for performance management solutions provider Bullseye Evaluation, emphasizes this latter point strongly.
“Frequent communication drives better performance, understanding, reaching goals and ROI impact,” he told IMT. “It’s not rocket science, but most companies don’t do it. It follows the same idea as a simple parenting concept: talk to your kids every day, not at the end of the month when their allowance is due.”
This is not to say managers should treat employees like children. In fact, the opposite is true when it comes to employee engagement. The EEI’s McCoy notes that organizations that have the most engaged employees share one great overriding characteristic.
“They treat employees like business partners,” said McCoy.