Articles

The only predictable thing about the economy is change, and not necessarily for the better. The American dollar might look strong now, but there's no guarantee it'll be rosy six months from now, especially in light of our growing trade deficit with Asia, the Asian stock market crash, and concerns about the state of the U.S. economy itself. In this uncertain climate, worker productivity is all-important to a company's financial security and, by extension, the national economy. Healthy productivity growth lowers inflation and helps the stock market; this is because employers can increase workers' salaries and earn increased profits without raising their product prices.

However, recent U.S. Labor Department reports show a decline in worker productivity of 0.2% in the second quarter of 1998 - the first such downturn in three years - despite keen competition in the job market and high wages. Since worker productivity is the key factor in determining American living standards, this downturn could be a premonition of economic crunches to come. Companies are therefore best advised to hope for the best while preparing for the worst by ensuring good worker productivity levels.

The catch, of course, is how to accomplish this. Employers have tried every means to get their staff in gear, from increasing wages to disciplinary measures. In a climate of downsizing and economic uncertainty, however, merely throwing money at the problem won't necessarily resolve it. What can be done to inspire these workers, win their dedication, and improve overall performance?

While searching for a way to balance productivity with wages, many companies are seriously examining incentive programs as a means to raise employee morale and increase their productivity levels. Jim Warren, owner of ShopWerks Software in Tualatin, Oregon and creator of an innovative employee incentive software program called PIP Plus, has studied worker productivity for years.

"In light of today's volatile economic situation, productive, satisfied workers are extremely important to a company's survival," Warren explains. "However, many companies don't have a concrete strategy to increase productivity. There has to be a constructive company-wide system for acknowledging and rewarding good performance, correcting weak performance, and building teamwork."

According to Warren, there are several clear indicators that workplace production could use a boost:

Personnel and overhead expenses increase while profits decrease
Excessive absenteeism and tardiness
Lack of teamwork amongst employees to reach shared company goals
Employees take longer lunches, stand around the water cooler, take excessive breaks and/or look busy while accomplishing little
Inability to attract, develop and retain high performance employees
Little or no communication between employees and management
Employees are unaware of company goals
Frequent production slowdowns
Late deliveries
Employees morale is low
High employee turnover

So how do companies reward employees and still increase profits? Through experience in his own company, Warren discovered that rewarding employees for work well done increases their satisfaction and productivity. He believes that a quality incentive program should:

Set realistic goals
Set improvement goals and performance standards
Include employees and management in decision making, essential for empowerment and communication building
Establish open communications on all worker and management levels
Clearly define how jobs will be measured and rewarded
Make a company-wide commitment to quality and honesty
Establish a supportive work environment
Recognize and treat employees as valuable assets
Reward individual effort and teamwork
Share the profits realized as incentive awards

According to Warren, when companies apply motivational incentives correctly, monetary rewards are paid for with additional profits gained from increased productivity, not out of the company's coffers. "The increase in your employees' performance will pay for the program," says Warren.