Last week, we announced that Marlin Steel would be giving a presentation on “Using Wire Baskets to Solve Material Handling and Part Fabrication Process Problems” at the FABTECH 2014 industrial expo’s Education Program at the Georgia World Congress Center in Atlanta, Georgia. Today, we would like to take a little bit of time out to mention that that isn’t the only presentation being given by Marlin Steel at the FABTECH 2014 expo.
This Tuesday, November 11, Marlin Steel is giving another presentation with the Precision Metalforming Association (PMA) Educational Foundation and the Hitachi Foundation: “Increase Employee Engagement.”
What Does the Presentation Entail?
As the title suggests, the focus of this presentation will be the subject of employee engagement at work. In particular, we’ll be discussing the benefits of having an engaged and motivated workforce, as well as strategies for getting workers to be “engaged and motivated.”
Just in case you aren’t able to make it to the presentation to get the whole thing, here’s a quick rundown of the presentation.
Shigeo Shingo & the Toyota Production System
The first part of the presentation will briefly cover the work and production philosophies of Shigeo Shingo. If you’ve read some of our previous blogs, you may have heard of Shigeo Shingo a few times (if not, check one out here).
To put it succinctly, Shigeo Shingo was a Japanese engineer who pioneered management techniques, systems, and concepts that would eventually become the basis for the Toyota Production System. This system emphasizes that “Higher labor productivity is achieved by improving work methods & increasing worker motivation & involvement. No matter what the level of automation, people will always be an essential & vital part of production.”
Over the years, many manufacturers have used elements of Shigeo’s teachings to greatly improve their productivity and quality.
Getting Motivated Employees
To get employees who are motivated and engaged with their work takes effort both during the hiring process and throughout the employer/employee relationship.
First, you have to find talented people and hire them. One theory from Nucor is that:
- Hire 5 talented people.
- Pay like 8.
- Produce like 10.
While this may seem a little simplistic, it’s a theory that Marlin Steel has used to great effect. When you can find talented people and bring them to your production floor, you’ll have a leg up on production vs. companies that rely solely on cheap labor to try to increase margins.
However, there’s more to being more productive than just hiring top talents. You have to keep those talents engaged, motivated, and up to date with their skills, which takes training and incentives.
The Marlin Steel Skills Matrix
At Marlin Steel, employees are actively encouraged to learn new skills that are of benefit to the company. There is a skills matrix board up in the cafeteria for all employees to see who has what skills, how the skills are ranked, and where there are opportunities to pick up a nice, fat raise for learning a new skill.
Not only does having a public listing of who has what skills motivate employees through friendly competition (e.g. Frank knows three skills more than Mike, and Mike doesn’t want to be second-best, so he starts learning new skills), it benefits the company by promoting redundancy for certain critical skills.
With training, employees will be better equipped to do their jobs effectively, sound more knowledgeable to vendors, work safer, and make the best use of your factory automation. To get the best skills in the industry, according to Ajax, you’ll want to allocate an amount of capital equal to 5% of your labor budget to training.
Keeping Employees Motivated: Cash Bonuses
One part of the reason why the skills matrix is so successful at deepening the skills redundancy of the company is that employees are given a quantifiable reward for learning specific skills in the form of a cash bonus. To busy workers with families to support and bills to pay, money talks much more than a simple pat on the back.
Cash bonus-based motivation goes beyond the training program, however. Employees at Marlin Steel also earn bonuses for hitting aggressive, but achievable, production goals. For these production bonuses, the ability to earn bonuses should be on a micro level (basically on a per production cell basis). This gives individual employees a greater sense of control over their ability to earn bonuses, while motivating them to help their immediate team members meet their production goals because they don’t want to be the guy who cost their working buddies their bonus for that week.
Not only should these goals be on a micro level for targeting production output, they need to be as immediate and short-term as possible so that there’s always an opportunity to get a nice, fat bonus on the next paycheck. When a bonus is a year away, with goals weighted for that long of a period of time, the goals feel too big and the rewards too far off in the distance to really be a big motivator. When employees can earn a big bonus to help them pay off this month’s mortgage, rent, auto insurance, etc. they’re much more likely to be motivated to try to earn that extra pay.
Naturally, these bonuses should be large enough to feel like a significant reward in order to serve as a carrot to keep production teams moving at a gallop. Offering every full-time employee the ability to earn these bonuses not only keeps them motivated, but encourages part-timers and temps a reason to become full-timers.
Keeping the goals for earning bonuses crystal clear in black and white terms makes sure that employees know what is expected of them to keep them working towards the right goals. For example, a production goal of a specific number of baskets so that you can fulfill a customer order is a good goal. A goal of “tidy workspace,” while a good general idea, is a bad goal for earning a production bonus because it’s subjective in nature.
Creating aggressive, but achievable goals creates mini-entrepreneurs that work as efficiently as they can to bring home the bacon, largely eliminating the need for an extraneous (and costly) layer of finger-wagging middle managers who harass employees over bathroom breaks and idle chatter.
If you’re going to FABTECH 2014, catch our presentation to learn more about how you can increase employee engagement, or visit us at booth B5317!