Imagine if you could improve — even double — workforce productivity in the warehouse or distribution center. Wouldn’t that be sweet? In their new book, “Warehouse Productivity,” authors Ron Hounsell and Pat Kelley present a blue-collar incentive plan that is designed to do just that. Their idea is to bring the corporate practice, common among many executives, of tying compensation to performance, down to all employee ranks. Their message: Extra pay is a reward for those who perform at high levels.
Pat Kelley, assistant vice president of logistics for TruServ, explains how the program works: First, the company establishes a baseline productivity expectation for different tasks and operations. Once an employee reaches a certain productivity level over that baseline, his or her hourly wage is adjusted upward. The employee’s performance is reviewed each month. If productivity drops back down, or if quality levels are not acceptable, the employee loses the corresponding bonus. The plan works, says Kelley, because approximately two thirds of the financial gain associated with the productivity increase goes to the company and one-third to the employee.
Kelley and Hounsell have implemented this type of Simplified Gainsharing program at distribution centers across the country, often with startling results. For example, TruServ’s productivity measure increased 79% from $619 throughput per work hour to $1,105, and quality levels improved by 40%.
The book guides the reader through the three major stages of implementing and operating a Simplified Gainsharing approach. It includes real-world examples of how to apply the principles and strategies outlined as well as a wide range of sample documents to help implement the program.
“Warehouse Productivity” is published by the Distribution Group. Additional information is available online at www.DistributionGroup.com/books.php or by phoning the Distribution Group at (800) 232-4317.