Once upon a time, not too long ago, there was a precision metal-working plant in in the Northeast USA. This plant had been through lots of upheaval due to a string of acquisitions, and the formerly unionized workforce was now non-union, with most of the original employees having successfully evolved with each change.
The time came when a new Human Resources Manager joined the leadership team, responsible for several sites that had been part of an acquisition about a year prior. This H.R. Manager met with all of the managers and began to visit three sites, of which this was the largest of the North American group.
This is the story of a critical three-month period in the life of this largest plant.
The H.R. Manager spent time walking through the plant, chatting briefly with people as they did their jobs and attending existing team meetings. She quickly determined there was resentment and dissatisfaction among employees so she began her work by establishing an initial foundation of trust with many employees.
It was then that she was able to learn the causes of the disgruntlement that permeated the plant atmosphere. Employees told her many stories about their work experiences there, stories demonstrating the reasons they were angry and frustrated with management.
You see, while there had been changes in the executive team, the original managers and supervisors had endured through the acquisitions and associated cost reductions that impacted spending for training, tools, new equipment and machinery. Certain management practices had been in place for several years, and the deteriorating working environment had caused the festering of ill-will and back-sliding performance.
The H.R. Manager quickly implemented a plan to talk with at least 90% of the workers to collect, validate and prioritze information, both the positive and the negative, from the perspectives of people organization-wide.
Here is what she learned:
- There existed a long-standing practice of management making decisions and changes without involving or forewarning employees. Many such changes impacted the work and how it was done.
- Employees had been ignored and considered to be complainers or trouble-makers, when raising issues of changes that had made work more difficult and more time-consuming, as well as hindering the ability of people to achieve the high precision machining craftsmanship required by customers.
- Employees had lost some benefits they’d had for years when they had been unionized.
- Employees reported that the plant was managed with heavy favoritism for certain employees who, in management’s eyes, could do no wrong.
- There was a set of financial metrics that if met was to have generated bonuses, but people did not understand the metrics or how they could impact them, and the associated bonuses had rarely been issued.
- Employees did not know the company’s strategy or the value of the site as an acquisition and they were uncertain about their future.
Site performance had gone from bad to worse in the year following this acquisition. Turnover was high, and it was difficult to find qualified replacements for the skilled machinists who left. Sales revenue was impacted by the plant’s continuous failure to meet delivery deadlines and by quality issues that drove away customers. Profit was eaten up by high scrap, low quality, late deliveries and material shortages.
Partnering with the leadership team, the H.R. Manager took the following actions:
1. Partnered with the President to create a communication that he delivered to the site explaining the purpose of the acquisition and the unique value this site contributed to the customers and the business.
2. Created a suggestion program and a cross-functional Suggestion Evaluation Committee. The initial launch included employees naming the program, purchase of T-shirts for everyone, and prompt review and pilot implementations of selected suggestions. Employees whose suggestions were piloted were rewarded with gift cards, and when piloted suggestions were made permanent, they were rewarded with a second gift card. There was an immediate burst of suggestions, all of which were piloted (the majority becoming permanent) followed by participation by over 50% of the people within 6 months.
3. Re-designed the bonus program and the metrics used to include non-financial metrics and to explain the key financial metric, trained the employees on the metrics, linked them to the business strategy and put in place a standard communication process including site-wide and team-level discussions with employees that showed how their work impacted the metrics. Performance against the metrics was tracked posted on a whiteboard and discussed weekly. These updates were set up as regular weekly meetings conducted by departmental managers. Within 2 months bonus performance criteria were achieved and bonuses were issued.
4. Partnered with the President to improve productivity and quality. Designed a production leadership development plan, which the President decided to implement jointly with the H.R. Manager. This included going to this site daily, where the President leveraged his own operations experience to lead cross-functional meetings each morning to plan production, anticipate problems, develop solutions, and to monitor progress; afternoon meetings were held to evaluate the day’s results and to plan the night shift’s work. These meetings included managers, supervisors, group leaders, manufacturing engineering, quality leaders, and production scheduling people.
5. Worked closely with managers, supervisors and group leaders to help them to develop new management approaches, performance goal setting, and improved communication skills for giving and receiving feedback and recognizing employees.
After 3 months, she and the President phased themselves out of the production meetings, transitioning leadership to the site team. In partnership with the leadership team, the H.R. Manager Recruited a Plant Manager, Manufacturing Engineer, and Production Planner.
The impact was significant! Within just a few months, problems with scrap and quality decreased visibly. Scheduling and purchase of materials improved and gradually enabled on-time delivery to improve. Employees were excited and engaged in their work. Performance was markedly improved.
The funny thing, was that this was all the result of leadership: establishing a clear sense of purpose including connecting each employee’s role to the business strategy, establishing metrics that guided prioritization and maintained focus on what was most important, building effective relationships with employees, providing prompt feedback to employees on their individual and team performance, encouraging and using employee input on changes and improvements, using effective incentives, treating everyone with respect, and investing time in teaching them, through the President’s production meetings, how to manage production effectively. It was not the result of one leader but the result of a focused team who, through these actions, built employee enthusiasm and commitment.
The H.R. Manager treasures the memory of this experience, and the people she came to know so well once upon a time, that not-so-long-ago time.
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