Employee Productivity, Part 2
“I got eight little fingers and only two thumbs
Will you leave me in peace while I get the work done
Can’t you see I’m working, oh, I’m working on it” -Chris Rea
Every company wants to make more money. In a challenging economy buffeted by heightened competition and a shrinking labor market – not to mention unexpected body blows such as the COVID-19 pandemic – the means to do so can seem frighteningly limited.
Reduce costs or increase revenue, right? What other options exist?
Oh, there’s a big one that is consistently overlooked: improving employee productivity. It’s an internal resource rarely considered, probably because no related “how-to manual” exists.
It’s too obtuse, too abstract, for most organizations to consider. Thus, they don’t.
Yet, the equation is simple: Get more return per spent dollar of labor compensation. Higher profits follow. Logical, right?
Here’s the rub: Ask five different managers how to boost employee productivity. You’ll likely get five different answers.
“Pay more.” “Say hi to everyone by name.” “Communicate better.” “Use engagement strategies.” “Show them you care.”
Points for consideration, right? Problem is, these are all undefined … and again, everyone might have a different answer as to what they really mean.
Pay how much more? Just say “hi” – is that really all? How should we “communicate better?”
What are the best engagement strategies for our situation? How exactly do you “show you care” – a group hug every day?
“Increasing employee productivity” is, for most organizations, a highly-appealing concept with few agreed-upon tools for implementation. What works? What doesn’t? Depends on which consultant you ask, or book you read.
So let’s go back to basic human nature. What motivates people to work harder and produce more with their labors?
The answer is simple: a direct, tangible benefit they receive in return. Think employees might go the extra distance if they have the proverbial “skin in the game?”
Our first post on employee productivity dove into this a bit. So let’s go further.
Remember the 1970s and 1980s, when U.S. executives and policymakers gaped in awe at the roaring Japanese economy, especially in automaking? A big driver was efficiency of their manufacturing plants, driven by a true team-based management model.
Wonder why this Asian island does well? Might have something to do with how, in Japan, more than 60 percent of companies have employee ownership plans.
The workers own all or a share of the businesses where they work. The more they produce, the better the company does … and their personal bottom line, too.
Employee ownership aligns the interests of everyone in an organization. More than 6,600 American companies have recognized this by implementing Employee Stock Ownership Plans (ESOPs).
What is an ESOP? Simply put, ownership vests a share of an ESOP company’s ownership to its employees, to increase productivity and profitability. The amount of employee ownership can vary. Nevertheless, creating the linkage between workers productivity and their own pocketbooks is a powerful incentive.
Therein lies the key to getting more out of an organization’s workforce … and a healthier bottom line. “Skin in the game” has been around forever. Yet, it still works.
Thinking of putting an ESOP to work in your organization? Contact Excel Legacy Group to learn the steps in ESOP planning.
You’ll need all your fingers, and both your thumbs, to get the work done. Your workforce and entire organization, though, will be glad you dove in with both hands.