Productivity Depends on Management

News Flash: The Labor Department reported that productivity declined at an annual rate of 0.9 percent in the second quarter of 2010.

It is all over the news that worker productivity dropped this spring for the first time in more than a year. Some people believe that this should be an indicator for companies to step up their hiring if they hope to grow in this economic downturn.

I do not find that many companies are taking the appropriate measures to ramp up their hiring practices. Most companies are still depending on doing more with less and the stress of that philosophy is starting to take its toll on management and other key employees. It is more important than ever that management has a complete knowledge of the work itself, exhibits strong interpersonal responsiveness, continues to be creative, and provides useful ideas to be successful.

Most people today believe that being “busy” is the answer. That the more tasks we do right will produce the desired outcome. Management needs to realize that efficiency does not necessarily bring results. It is the effectiveness of the activities that everyone performs on a daily basis that is the key to success. It's not the number of hours you work, but the results of your activities at the end of the day.

Some techniques that management can use to improve employee productivity may include the following:
• Improve the effectiveness of your supply chain
• Improve the pattern of workflow; less duplication of efforts
• Increase quality by focusing on the reduction of error rates to avoid reworks
• Setting up a schedule to reduce or eliminate down time
• Make sure everyone is performing only value-added work
• Improve morale (read article: 9 Ways to Boost Morale)
• Provide an effective development process to improve productivity
• Understand the need for everyone to reach their potential and be goal-oriented.

Most management today has not been taught how to be more effective. If you are not going to ramp up your hiring, then you better make you workers more effective first and foremost. If everyone improves their performance and productivity while lowering their stress, you will reach your company goals.

Funding Cutbacks Curb Achievement

Some of the new barometers for Training and Development in 2010 are starting to show signs of improvement. It sounds like we can expect to see old times again for training and development shortly. But I still feel that businesses sense the pressure of the economy. In my travels, I have not heard that many companies have opened up their training budgets. The economy certainly plays a major part of the decision making process to fund employee training. Most companies have reduced their workforce while also reducing or eliminating resources that provide learning opportunities like meetings, courses, etc.

Funding these programs and realizing the fact that training and development can often makes the difference between companies who are the industry leaders and others who are on a lower tier of success.

What has all this reduction in training and learning opportunities done for your workforce? The 2009-2010 U.S. Strategic Rewards Survey reported that employee engagement levels for key personnel dropped almost 25% as a result of restructuring, and employee benefit cutbacks, including professional development and training, indicating a significant slump in employee morale and productivity!

In most of the companies, a reduction in the workforce usually elevates the workload of the remaining staff while adding stress and frustration to those having to put in the extra time. Companies are put in position where they must start focusing on their key employees and start developing a Talent Management process that will enable them to retain their top producers and hopefully develop their high potentials. It certainly is a vicious cycle that creates a revolving door to top talent when the economy comes back.

Are you prepared for the exodus?

Leadership in business today needs to focus on their current staff and analyze their talent needs for the future. Funding for training compared to losing a key employee to the competition is nominal. The same is true compared to losing a high potential staff member that will be needed in the future. It is important that companies realize that people are applying for a position that leads to a better future and they feel it is the company’s responsibility to provide the opportunity for a career. Talent management is key to the future of all businesses and the funding for people development should never take a backseat to anything else.


Richard Hohmann
Senior Consultant
Innovative Leadership Business Consultation
Phone: 609.390.2830
E-mail: rhohmann@innovativeleadershipdv.com
Website: www.ILDV.org