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Retaining Good Employees Takes Commitment

Excellent interview with F. Leigh Branham of Keeping the People, Inc.

There are a lot of great points made about how the construction industry treats people and often fails to do the basic things required to retain top talent.

One of the questions we get asked a lot is about compensation or bonus programs, what we have seen, what works, what does not, etc.

Mr. Branham makes a great point by calling it C-A-R: Challenge-Acheivement-Reward

I can not think of a better phrase for this and was just telling a client last night about using this strategy to provide bonuses and rapid feedback.

You can not expect results to be driven off of some formula based on company profitability that rewards each person in the company some little slice of those profits.

When you hand an electrician a check for $200 for a job that they worked on which closed out 6 months ago you have done nothing at all to drive performance.

On the other hand let's look at something that could truly drive performance. Let's say we had to hang light fixtures and there were 1,000 of them.

Per the estimate each fixture was suppose to be installed in 30 minutes - for a total of 500 man hours.

At this point in the job we look at the job cost report and see that we have already spent 40 hours just receiving and moving the fixtures around the jobsite, leaving 460 hours to actually install them.

Do a quick estimate of how long it will take to troubleshoot and punch list the inevitable minor problems such as bad ballasts and lamps that you will have with 1,000 fixtures, let's say we take out another 30 man hours.

That leaves us with 430 man hours to get these 1,000 fixtures installed.

Some quick math tells us that we need to get 18.6 (19) fixtures per day, per person installed.

We know that only 65% of the time we spend 'working' is spend on actual installation during the average construction day so we have lots of room for improvement and can easily set stretch goals a little high - 20% or 25% increased productivity is not an unrealistic goal.

Let's set the daily goal per-person for these fixtures at 23 fixtures and set up a little reward / competion system.

You have a four person crew working on this so it should take just over 2 weeks to complete (1,000 / 23 / 4 = 11 Days)

Step 1: Simple visual measuring devices are the key to good process improvement. People are naturally competitive. Put up a piece of sheetrock by the gang box or trailer and write the total fixture goal (1,000) and the total expected per person, per-day (23) on there.

Step 2: Make a simple table showing the four people down one side and the days across the top where they can write in the number of fixtures they installed daily.

Step 3: Setup short and long-term rewards. The short-term reward is that you buy lunch the following day for everyone who makes their daily goal. The long-term reward is that they can go home (with pay) early on Friday (day 10) if they get all 1,000 fixtures installed.

Step 4: Communicate this with everyone on the team

Step 5: Be a cheerleader - your job as leader is to MAKE everyone successful

Let's look at the math on this:

Let's say that setting this whole thing up and staying on top of the crew, being head cheerleader, etc. cost you 10 man hours. You had already spent 40 hours on logistics and planned for another 30 hours on misc. punch and inspection time.

You will have bought lunch for your crew every day for 10 days - about $320 or so.

If the crew really knocked stuff out they may have gotten to go home early on that Friday - or not had to come in at all depending on how much they accomplished. In any case they got rewarded and got a feeling of accomplishment.

If you are able to accomplish the goals outlined including sending the crew home early with pay you will have spent 400 hours out of a 500 hour budget - saving 100 man hours at a cost of $320. That's a good investment if I've ever seen one!

Even if you failed to meet the finish by Friday goal and worked the 11th day to finish up you would have spent 432 out of 500 hours, still saving 68 hours at a cost of buying lunch every day and making the work day fun.

People do really innovative things if given the chance and the productivity level in construction is so low that you can really beat the budget by an amazing amount if you get creative.


Posted by David on February 13, 2007 09:20 AM|Permalink

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