Article: A quest for productivity: Don't overdo tough measures

Strategic HR

A quest for productivity: Don't overdo tough measures

Looking Beyond Cost Cutting Innitiatives
A quest for productivity: Don't overdo tough measures

Looking Beyond Cost Cutting Innitiatives

While bleak business environments call for tough measures, one should be careful not to overdo it. In today’s business environment of reduced revenue expectations, many companies and especially the SME’s (Small and Medium Enterprises), are bound to focus effort and resources on cost cutting initiatives. However, managers should not forget that the raison d’etre of any company is to sell goods and services that add value to their shareholders. The focus during economic downturn should be to do what the company does best but better, cheaper and faster. It is about productivity and maximizing output from limited resources and not exclusively about ‘saving strategies’ or about ‘cost cutting measures’.

A study commissioned by Proudfoot Consulting found that the three main barriers to productivity are insufficient management planning & control, inadequate supervision and ineffective communication. Addressing management barriers to productivity is one of the key ways the HR function will be able to make a major difference in the productivity of the organization for today and for the future.

Management Planning and Control, back to basics

Many SMEs struggle to create the right organization structure to achieve their business objectives. Delegation and empowerment to employees also requires clarity in roles, responsibilities, objectives and accountability for every role. And all these cannot be done without setting up control mechanisms to monitor results on an ongoing basis. Studies show that companies that follow an open, fair and structured performance evaluation process experience 10 to 15 percent more productivity and 20 to 40 percent fewer accidents than other companies.

Revisiting your organization structure, creating clear reporting mechanisms and defining roles and responsibilities to each employee by formalizing role definition will help on aligning your organization’s and employees’ goals.

The Importance of the Managerial Function

A research paper from Gallup shows that 16 percent of any organization is ‘Actively Disengaged’. This means that on average, 16 percent of the people in your company are actively working to destroy the culture you are trying to create. Another 55 percent are stuck in neutral (not engaged). They are waiting for someone to give them a push. Finally, 29 percent are really into what they are doing (they are engaged). There is one major factor that makes all the difference in improving employee productivity; that is the workgroup manager.

Implementing a performance management process, providing managers with clear and simple HR policies and processes that are fair and easy to execute, mentoring and coaching your managers and HR teams to get the best of employee engagement initiatives will help you overcome this barrier to productivity.

Creating Channels to Communicate and Collaborate

Though individual genius plays a role in innovation, increasingly it is the ability of knowledgeable and skilled individuals working in collaboration that creates value. The reason for this is because the knowledge needed to create new products and services has become so complex that it requires highly specialized skills that can only come together through the involvement of individuals from multiple disciplines.

Creating initiatives to enhance communication and to create collaboration and teamwork spirit will be one of the most critical factors in determining productivity and innovation.

Finally, the Role of Technology in Productivity

Technology appears to stimulate an investment in organizational capital. New processes and new ways of collaborating and communicating often appear as a result of introducing technology into an organization.

SMEs today have access of tools and processes that are now affordable and available off the shelf. Choosing the right product, creating a structured plan for implementation and engaging your employees during the implementation process will be key in getting the maximum output from the investment. Small and Medium enterprises should continue to focus on their productivity more today than even before.



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Topics: Strategic HR, C-Suite, Performance Management

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