The way companies measure the value of their employees is critical in creating a positive and inclusive working environment. However, relying solely on traditional metrics such as seniority and education levels may not always be as beneficial as they initially appear.
While these factors are important when assessing an employee's skills, experience, and knowledge, they can inadvertently contribute to a divided workforce.
In this blog post, we will delve deeper into the topic of measuring employee value and explore both the advantageous and detrimental aspects of using certain metrics. By examining various approaches, we aim to provide valuable insights and actionable steps that can be taken to refine and improve the existing system.
Through a comprehensive understanding of the nuances involved, companies can strive towards fostering a more equitable and rewarding workplace for all employees.
My Experience With the Value of an Employee
Reflecting on my initial foray into the manufacturing industry, I fondly remember stepping into my first role recently out of university, armed with a degree in chemistry and psychology. At that time, I was transitioning from food service at my alma mater and was excited to dive into a more industrial environment. Despite my lack of manufacturing experience, I was fortunate to secure the role, largely owing to my academic credentials and presumably, a successful interview.
This opportunity was a remarkable turning point in my career - the blend of chemistry and chemical engineering that it entailed was profoundly engaging. However, it was a company meeting that propelled me to contemplate more deeply about the metrics used to measure an employee's value.
The company utilized a points system primarily based on two factors - higher education and years of experience with the company. Intriguingly, higher education accrued points at a rapid pace.
Upon joining, my academic achievements accorded me approximately 8 points, while a colleague with 5 years of dedicated service had about half of that. Initially, I felt a sense of pride and validation, mistaking my academic prowess for professional value.
However, on deeper introspection, this realization was unsettling. I was an unproven entity in the industry, and my degrees, while valuable, did not attest to my ability to match, let alone surpass, the productivity and value offered by an experienced colleague. This dissonance sparked my interest in the nuances of employee value assessment.
Education Can Compete With Experience... Down the Road
Starting Out
As I mentioned earlier, when I started this job, I was faced with the challenge of having no prior experience, which put me at a distinct disadvantage in terms of productivity and specific knowledge. However, I didn't let that discourage me. Instead, I embraced the opportunity to learn quickly and make up for my lack of experience.
The learning process fascinated me, and I found myself driven by curiosity. This curiosity became the catalyst for my understanding, allowing me to grasp concepts and practices much faster than I had anticipated. I dove into every task with intrigue and determination, eager to transform my initial knowledge deficit into an opportunity for rapid growth and learning.
With each new challenge, I sought out additional resources and sought guidance from experienced colleagues. Every setback became a chance to learn and improve. I embraced a growth mindset, constantly pushing myself to expand my knowledge and skills.
Over time, I began to see the fruits of my efforts. I became more confident and proficient in my role, and my contributions started making a tangible impact on the team and the organization as a whole. I realized that my initial lack of experience was not a limitation, but rather an opportunity for me to prove my ability to adapt and thrive in a new environment.
Starting as a fabricator, I focused on the intricate cuts, borings, and other modifications that were crucial in processing the product coming off the production line. Concurrently, I also acquired a practical understanding of the shipping and quality control sectors of the job. As I progressed, I was tasked with comprehending the complexities of the line operation segment, an opportunity I grabbed with both hands.
Time to Shine
With time and diligence, I developed proficiency in line operation. However, what truly set me apart was my ability to identify and address certain persistent issues that the company had been grappling with.
Here, my academic background in chemistry came to the fore. It gave me a deeper understanding of the processes involved, allowing me to propose innovative solutions. This stronger grasp of the underlying processes helped to distinguish me from my peers, many of whom, while talented and skilled, did not possess the same depth of knowledge. This not only validated my educational pursuits but also underscored their value in problem-solving within the company.
Example 1
One of the major issues that arose was related to a raw chemical used in our production process. Recognizing my chemistry background, I was earmarked to investigate the root of the problem. Upon examination, I noticed that the mixed chemicals seemed to have formed an emulsion with water, as indicated by the coloration.
I furthered my analysis by inspecting the polymer to be mixed with the base chemical, which has areas on the molecule that have an affinity for both oil-based (non-polar) materials, and areas that prefer water-based, polar substances. In other words, we had unintentionally created a substance akin to soap.
This observation underscored the importance of maintaining a low water content in the base chemical before mixing it with the polymer. Equipped with this insight, we implemented water tests to catch excess water content.
Whenever the water content was too high, we drained it off before allowing the base chemical to mix with the polymer. This successful resolution of a persistent issue not only marked a significant contribution from my end but also showcased the unique value I brought to the table, leveraging my academic background in a practical setting to a degree that many of my peers and management lacked familiarity with.
Example 2
The second illustration of my value as an employee came into play when dealing with the wastage of chemicals. Our standard procedure required us to mix chemicals in certain proportions, dictated by the specific products they were intended for.
If the proportions weren't precise, the solutions were deemed useless and discarded - a costly practice indeed. To address this, I employed a bit of mathematics and the functionality of Microsoft Excel to create a dynamic spreadsheet.
This tool allowed for adjustments to solutions that deviated too far from the desired parameters. Using this system, one could fine-tune the quantities of all other chemicals based on the off-kilter one. It even accounted for the need for larger containers when making these adjustments.
This innovation led to a substantial reduction in waste and enabled us to use more valuable materials in the production process rather than discarding them. It's important to realize that waste is a multi-faceted cost.
In this case, you pay for the raw materials, and the labor to create the solution, and if the solution is incorrect, you bear the cost of solidification energy use and compliant disposal.
With no opportunity to recoup these costs, as you would when materials and labor are invested in a sellable product, the financial burden is stark. Hence, my ability to minimize this waste and conserve resources further underscored my unique value as an employee.
Detrimental Ways to Value Employees
In my experience, there have been instances where the system designed to value employees had detrimental effects. Now you might be wondering, what exactly do I mean by "detrimental'? Well, I am referring to any value system that promotes an environment of division, adversarial competition, or even sabotage.
This type of system, rather than fostering teamwork and collective growth, pits employees against one another. The competition can become so fierce that it leads to unproductive behaviors like sabotage, where an employee may hinder another's work to gain an upper hand. Instead of encouraging collaboration and mutual success, such a system breeds hostility and negatively impacts the overall work environment.
Education vs. Experience
The dichotomy between education and experience in the workforce often leads to a sense of division among employees. Those who have amassed years of experience but lack formal education may feel a sense of resentment toward a recent graduate, seen as a mere "kid" but nonetheless valued by the company for their shiny new diploma.
Conversely, newcomers may question the notion that experience alone should equate to value within the company, feeling that their fresh perspectives and book-learned knowledge are undervalued.
Both viewpoints hold a measure of truth, illustrating the need for balanced recognition of both education and experience. If these aspects were weighted more similarly, it could potentially lessen feelings of animosity and promote a more harmonious workplace.
While we've been discussing the merits and drawbacks of both education and experience, it's important to point out a fundamental flaw in using these metrics as the primary means of assessing an employee's value. Both education and experience are, in a sense, similar.
They are indicators of an individual's theoretical capacity to perform, but they don't necessarily translate into actual results for the company. For instance, a highly educated employee or one with decades of experience may not necessarily be the most productive or the most innovative.
They may not have the insight to devise cost-reduction strategies or to enhance the systems and processes within the company. Thus, placing undue emphasis on these factors can overlook the true potential of an individual to contribute to the company's success.
Rewarding Metrics That Encourage Harmful Competition
While a certain level of competition can be beneficial in a work environment, fostering motivation and personal growth, it's crucial to avoid a competitive culture that encourages progress at the expense of others. This type of environment can lead to resentment, decreased morale, and potentially even sabotage, as individuals prioritize personal success over the well-being of their colleagues and the company as a whole.
This is particularly pertinent in shift work scenarios, where a seamless handover between shifts is critical. Should one shift fail to fulfill its responsibilities due to competitive practices, the entire process could easily break down, compromising productivity and potentially leading to damaging consequences for the business.
Therefore, it's important to promote a culture of collaboration and mutual respect, where success is achieved collectively and individual achievements are recognized in a way that does not diminish the efforts of others.
Consider a hypothetical scenario where company management decides to incentivize productivity by offering a pizza party and gift cards to the shift that produces the most. This competition might appear beneficial at first glance, but it fails to account for several factors.
For instance, shift teams do not control the volume of the product scheduled for production. Also, this approach could be inherently unfair to teams if one produces a product that requires numerous pieces but uses similar amounts of raw material.
The competition could also be skewed if the process of producing different products necessitates equipment change.
Imagine a scenario where the previous shift was producing, but your shift is tasked with a time-consuming change-over. This process cuts into your productivity, but the previous shift, having produced all day, may be celebrated for their 'good job.'
Further complications can arise during hand-off periods. If the departing operator neglects their end-of-day checks, the incoming operator might not spot issues in time to prevent a process upset. The departing shift operator escapes any repercussions, having achieved their production quota, but the subsequent shift is now set back, causing a drop in overall product output.
Such a situation highlights the potential for a lack of thoroughness or even subtle sabotage during shift changeovers. Consequently, rather than enhancing productivity, this competition ultimately results in a drop in overall output— the exact opposite of the intended outcome.
Beneficial Ways to Value Employees
Look for Ways to Change Detriments into Benefits
Reflecting on this, it became apparent to me that detrimental employee value methods could be transformed into beneficial ones with just a few tweaks. To illustrate, let's review the concept of pizza parties and gift cards rewarded for hitting production metrics.
Instead of incentivizing competition, we can reframe this to foster collaboration and mutual success. Let's say the reward is achievable only if all teams reach a minimum productivity level for their respective shifts, with a composite minimum that must be met collectively.
This approach encourages teams to work in concert, particularly during shift changes, rather than focusing solely on their individual goals. In essence, it's an all-for-one and one-for-all scenario, promoting unity and camaraderie over rivalry. If all shifts meet their targets, the entire company benefits, an outcome far more desirable than a single shift excelling at the expense of others.
Emphasize Proven Value Over Potential Value
Job Performance Evaluation
Just as education and experience are measures of potential, yet-to-be-realized value, other metrics can effectively demonstrate the actual value an employee brings to the table. For instance, consider the concept of performance evaluations based on job requirements, akin to grading a report card.
As an advocate of traditional methods, I often use the A through F scale. To me, when hiring, the minimum expectation is a 'C' grade performance. Everyone aspires to have 'A' grade employees, but how often are companies willing to invest adequately in acquiring that level of talent? In my view, a 'C' grade employee, denoting satisfactory performance, is a valuable asset, contributing more benefits than detriments to an organization.
'B' and 'A' grade employees, those exhibiting above-average and exceptional performance, should be recognized and incentivized beyond their paycheck since typical compensation usually aligns with satisfactory performance. If we encounter a 'D' grade employee, this signals the need for performance improvement interventions to elevate them to at least a 'C' grade.
An extended stint in the 'D' category suggests the employee is providing less value than they're compensated for, resulting in a net loss for the company. Finally, 'F' grade employees require urgent corrective action or reassignment; if improvement doesn't ensue, it may be more beneficial to part ways.
Embrace and Reward Innovation
Another way to appreciate the value an employee brings to an organization is by recognizing and fostering innovation. Often, employees working at the grassroots level have more intimate knowledge of day-to-day operational inefficiencies than management.
If an employee identifies an issue within a process, such as excessive waste, inventory shortages, or other operational hurdles, and provides a viable solution, this proactive attitude not only solves the immediate problem but also adds tangible value to the company. Such value can manifest either as cost savings or increased profits, depending on the nature of the issue.
Therefore, it is crucial for companies to not only pay attention to these contributions but also to reward them accordingly. These rewards can be in various forms, such as public recognition, promotion, or a bonus. Acknowledging and encouraging innovation in this manner not only boosts employee morale and job satisfaction but also cultivates a culture of continuous improvement. This approach, in turn, can yield substantial long-term benefits for the organization.
While it's natural for some employees to feel envious of their innovative colleagues, it's key to remember that rewards here are based on tangible, realized value. For example, an employee with a background in chemical engineering or chemistry, working in a manufacturing process based on chemicals, may be able to contribute in ways others can't.
However, this doesn't mean there aren't ample opportunities for all employees, regardless of their field, to add value with their intelligence, savvy and innovative ideas. It's crucial to foster an environment where all employees feel comfortable to propose improvements.
Yes, caution is needed to avoid missteps, yet as the saying goes, "You fail at all the goals you don't shoot for". Encouraging broad participation in innovation can stimulate a culture of continuous improvement, where everyone strives for excellence and contributes to the company's success.
Conclusion
In conclusion, the value an employee brings to a company is paramount and forms the foundation of the hiring rationale. The choice of employee valuation systems can significantly influence the corporate atmosphere and ultimately, the overall success of the organization.
Resorting to public valuation systems that foster a climate of envy or detrimental competition may prove counterproductive, potentially leading to sabotage and significantly hampering organizational growth.
Conversely, adopting valuation systems that acknowledge the actual value presented, promote cooperation, and stimulate innovation is likely to bolster productivity and profitability.
Therefore, companies need to measure the value of an employee in a manner that ensures a win-win outcome for both the employees and the organization. The value of an employee, therefore, extends not only to their immediate contributions but also to the company's long-term ambitions and successes.