Recently I was in the Texas panhandle and in a town which I was not very familiar. When I was ready to leave I got on the only highway and started on my way. My GPS was right in front of me; but, I was not really looking at it. After 5 miles or so, I drove by a mileage sign. The sign had a city on it which was in the opposite direction of where I was trying to go. I looked at my GPS and it had been telling me all along that I was going in the wrong direction.
This is very common in organizations as they are making great time while going in the opposite direction of their goals. No one gets up hoping that their employee turnover is worse, they have even fewer people show up for work that day and they lose one of their most skilled craftsmen. But, I see that every day. No one is looking at the organizational GPS to see they are going in the wrong direction. They see it in the symptoms detailed above.
Years ago, I had just been promoted to Vice President of Human Resources. What were the goals of this organization? Not much different than everyone else. Make the customer happy with excellent service and value. Perform the work with safety as number one and within the guidelines set down for each service line. Pay our employees a wage which was in direct relationship to their value and customer satisfaction. Lastly, make a reasonable profit.
Without going into details there were several issues with the above. We had major problems with turnover, skills gap, chronically open positions and not being able to respond to our customers’ demands. We lost jobs because we could not respond. We lost people because of our pay, benefits and culture was not markedly different from the other area employers.
Increasing employee value drives employee engagement
Over the next couple of years we did numerous things to increase the value of our employees. We no longer lost work. We were able to respond to new work which we had never done before. Our employee utilization went through the roof. Our profits in dollars and our profit margin also went through the roof. Therefore, we were able to pay more in dollars but actually less as a percentage of revenues. All of this as more in line with our goals.
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