Money Matters: Improving Employee Productivity and Retention
By Paul Bieber
When it comes to your employees, do you know what they truly cost you? Here’s what an average glazier making $20 an hour really costs:
• Wages at 2,080 hours (including holidays, vacations, etc.): $41,600
• Overtime at five hours per week, 35 weeks, at $30/hour: $5,250
• Year-end bonus/holiday gift: $1,500
• Federal and local taxes at 10 percent: $4,835
• Medical insurance, workers comp, etc. at 30 percent: $14,505
• 5 percent of supervisor’s cost: $6,000
• Company truck, tools, supplies: $15,000
• Total: $88,690.
Add in non-productive work hours, such as driving to jobsites, training and safety meetings, and coffee breaks, and an average glazier will cost you more than $105,000 per year. Working at best 1,500 hours, and earning revenue for your company, this becomes a whopping cost of $70 per productive hour (even more in large cities). That doesn’t include business overhead or profit. Adding those in, you’ll be over $100 per hour. Retirement costs aren’t included here, as many glaziers don’t offer a plan (you should, though, if you want to retain top talent).
INCREASE PRODUCTIVITY BY 10 PERCENT
All you have to do is get your employee to want to work just a little better. The best tool I’ve used is a well-written and implemented employee review pro-gram. Many moons ago when working for a glass fabricator, I introduced a radically new employee review system, and productivity significantly increased.
We had nine questions, five relating to the individual’s actual work and four relating to how well the company worked for the individual. The review didn’t criticize an employee for a problem occurring three months back; that should have been handled that day.
The supervisor starts writing the review about four weeks before it actually happens, and should spend four or five hours doing this. The plan needs to be written for increased productivity. You can’t just say, “Work harder” and end the interview. It needs to lay out a step-by-step program.
Two weeks out, give the employee a blank review to fill in with the focus on improving productivity and how the company can help … this could be better tools, more training or an innovative idea. If an employee doesn’t fill in the form, or gives a ten-minute write-up, you know that person doesn’t care about improving productivity. You probably need every employee you have, but now when a good candidate walks in, you know who is on the list to go first.
The face-to-face review should last about 45 minutes, with just a few minutes looking back at last year. Spend the balance discussing the upcoming year and what the employee and company can do to improve productivity.
FOLLOW A GRADING SCALE
In our nine-question review, there was a four-point grading scale from weak to superior with both the employee and super-visor writing a grade. If there is agreement in the grade, then the conversation turns to how to improve even more. When in dis-agreement, each person should take two or three minutes and say why they graded that way. Now here’s a surprise. In just about every case, employees grade themselves lower than the supervisors did. Just telling employees how good they really are raises moral. When there’s disagreement, the supervisor may change or keep the grade, but has to explain why that grade was given and what the employee needs to do to improve. Together, they create a plan, reviewable after 60 days, which can show the improvement needed.
A CLOSER LOOK AT DETAILS
With those employees who think they are perfect and have nothing to improve, you can remind them of incidents that have occurred, or raise ideas that they didn’t think of.
A solid review will take about ten hours of a supervisor’s time to prepare and meet with the employee. Some employees say they won’t fill in the form if they’re not on the clock. Pay them a couple of straight-time hours and see if they put any effort into it. If they have, it’s a good investment. You’ll quickly find the employees that want to grow with you and together you’ll create a program to help them be more productive. An employee who wants to work smarter, achieving more goals, will pay you back ten times over.
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