Keys to Motivating Employees Parcel Shipping and Distribution Forum 2006 Wayne M. Teres Teres Consulting Inc. teresconsulting.com

Successful Motivation Programs Best of class warehouse operations have productive and motivated workers as a result of successfully implemented employee motivation programs

Why Invest the Time and Effort? Lower costs and lower employee turnover Increased quality and productivity increases profits Low investment - High payback

How Motivating are Your Programs? Do your employees feel adequately recognized? Do your employees get excited about the program rewards? Do your employees have input into the rewards they receive? Does your program drive the behaviors that you desire?

Program Essentials Hire the right people – Hire smart –Hire for attitude, dependable, motivated people Southwest Airlines Enhance desired outcome of the organization – motivate behavior to achieve corporate goals Provide interesting work –If tasks themselves cannot be fulfilling, team collaboration or membership in a committee can be used to create interest and value at work

Program Essentials Recognize – employees are motivated by intangible rewards –Make people feel good about their current and past accomplishment Create cost effective programs Provide visible feedback Build on past programs success

Program Essentials You get what you reward! –Be sure you have clearly defined what you want to get, then use rewards and recognition to move toward those goals

What is your Goal? What outcome do you want Make sure it is a global goal, not a local goal Example

Why Rewards Fail Excessive dependence on monetary rewards Lack of recognition value Entitlements Wrong things are rewarded Delay De-motivators

Excessive Dependence on Monetary Rewards Money is not the common denominator of achievement Money rewards are very costly, often difficult to maintain and hard to take away When people are striving for money, they will often take the shortest and fastest route to maximize their financial gain – often sacrificing quality

Lack of Recognition Value Few organization realize the importance of recognition and appreciation Everyone wants to be recognized Most workers feel unrecognized Recognition is the most cost effective motivator Highly motivator organizations celebrate small successes

Entitlements Be careful with monetary rewards, they become viewed as entitlements Thanksgiving turkey Mix up your programs to avoid the entitlement belief

Wrong Things are Rewarded Rewarding the wrong things occurs often Be careful what you ask for –Productivity example Remember no matter what you say verbally or written in your manuals, what you reward is what you get Ask yourself – Do the rewards we are giving elicit the performance we want?

Delay Research discloses – Delay discounts any reward In most companies, rewards do not occur promptly –For example, yearly profit sharing Build instant recognition into your program –Rewards on the spot

De-motivators The most common is unfairness Be constantly aware of them Avoid the perception of unfairness Most de-motivators can be eliminated by involving your workers when designing your program

Proper Motivation Program Design Define the objectives of the program –What do you want to achieve? Decide how you will measure it Discover what motivates your workers Decide what the reward should be

Selling the Reward & Recognition Program Getting top management commitment Communicating to the worker Involving the worker –People fear the unknown

Communicating the Program to the Worker The Role of the Supervisor –Can make or break a program Conditions –Standards are based –System is dynamic and will need to be changed – no surprises –When it will change If business conditions change

No Train, No Gain! Training –Greatest reason for failure Employees won’t understand –Methods –Their Role –What is expected of them Supervisors don’t know what is expected of them

Quality Incentive Program Employee motivation program to increase Quality by reducing the following errors: –Inventory –Shipping, over, short, damaged or poor quality –Paperwork Team based reward –the entire warehouse gets the same reward

Quality Incentive Program Calculating the Reward –Determine current status and what quality errors cost –Identify the savings by improvement –Decide what percent to share with the warehouse

Quality Incentive Program Benefit –Customer/Employees/Company wins Advantages –Ease of administration –Promotes teamwork –Encourages teamwork

Safety Program Employee program to reduce work accidents –Accidents increase insurance and lost days Measurement –Number of days without an incident Program - Safety bingo –Every worker receives a bingo card –Each day without an accident a number is drawn –Prizes increase in value as number of days without an accident increases

Safety Program Additional Rewards – Safety Milestone, say 100 days without an incident On the 100 th day, pizza celebration –Supervisors and Managers unfurling banners and streaming confetti to celebrate –A celebration that was not forgotten –A memorable event Celebrate milestones

Gainsharing Programs Gainsharing programs are group incentive programs that reward employees when targets like cost reduction are met usually in a percentage split These kinds of programs are self-funding

Gainsharing Key Features Typically paid out in dollars Programs have no effect on base pay or individual performance appraisal Should have inclusion of financial, quality, or productivity measure that the individual has control of Programs should be based on improvements achieved

Gainsharing Benefits Can help organization achieve objectives Can be a method of introducing pay bonuses (rather than salary) to employees May promote commitment to goals Low cost –Self funding

Gainsharing Challenges Formulas and calculations may be difficult to create and understand Eventually reach a point in diminishing returns Could distract people from less measured goals not rewarded by the system Requires a shift toward team oriented management style

Pitfalls that Can Cause Failure Lack of commitment from top management Poor communication with employees Doing “To” rather that “With” Installed on poor work methods Doing it too quickly

Pitfalls that Can Cause Failure Lack of Supervisory support and involvement Blindly copying another company’s plan Poor worker acceptance Focusing on productivity and omitting quality Failure to seek outside assistance when necessary –Don’t be afraid to get help –You don’t know what you don’t know

Top 7 Ways to Motivate a Worker Personally thank them for doing in a good job – one on one verbally in writing or both. Make sure it is timely and sincere. Take time to meet with the employee and listen to them – Theirs no substitute for face time when building relationships Provide regular specific feedback about their performance Encourage new ideas and initiative

Top 7 Ways to Motivate a Worker Involve employees in decisions that affect them Recognize, reward and promote people based on their performance. Deal with low and marginal performers so they improve or leave. Celebrate successes!

5 Ways to Keep Your Program Exciting Charts and Displays –You can not have enough When using money issue separate checks Team competition Champion & celebrate success –Celebrate milestones –Tee shirts and other recognition

Low Cost Motivational Rewards Pot luck lunch Gift certificates Post names of winners in warehouse Achievement certificates Write up winners in company newsletter T-shirts Free lunch Gas cards

Low Cost Motivational Rewards Sporting event tickets Coupons for gifts –Employee chooses reward Wash the employees car Give the person a two hour lunch Extra time off Write a letter of praise

In Summary What gets measured, get done What gets measured and fed back gets done well What gets measured, fed back and rewarded gets done repeatedly! Make common sense, common practice –Practice recognizing your workers and their achievements –Design your program to elicit the behaviors that drive your goals Do not confuse simple with simple minded

Resources Hire Tough – Manage Easy – Mel Kleiman The Goal – Eli Goldratt 1001 Ways to Reward – Bob Nelson

Thank You Wayne M. Teres Teres Consulting Inc. teresconsulting.com