Improved people management boosts your bottom line
The bottom line of F&B businesses across the EMEA region is being hit by ineffective people management according to research by the University of Sheffield’s Institute of Work Psychology.
In a sample of manufacturing businesses, it discovered people management practices led to variations in productivity of 18 per cent and was responsible for 19 per cent in profitability.
The impact of underperforming employees includes hours spent correcting mistakes, low productivity plus additional costs of hiring and training staff to do the job better.
While the key manufacturing components of productivity and profitability suffer as a result of underperforming employees, manufacturers are also unable to get the best out of their leadership team.
The Future Foundation examined seven countries across the globe to understand the costs associated with poor performance. Using the United States as an example, it revealed that US managers spent 13 per cent of their time managing poor performers and 14 per cent of their time correcting mistakes. This translates into an average of 34 days per year (or six working weeks) dealing with underperformance.
And it gets worse for organisations with a turnover of more than £7million, as managers spend 41 days on managing poor performers.
To make the best use of managers, businesses need to take steps that ensure it has little or no under-performing employees.
Having the right managers in place – or hiring them – will definitely assist. However, businesses need a wider strategy that fits the organisation’s goals and employ management practices that fit and reinforce those goals.
There are four steps to achieve this:
Increase accountability – Everyone’s contribution can and should be measured. Not setting clear, measurable performance standards for each employee often leads to poor performance. Workers might think they are attainting expectations but unless this can be measured, success is open to interpretation.
Improve your hiring process – According to The Future Foundation study, it takes an average of eight months of training to achieve expected performance levels from a new employee. Most companies spend a great deal of time creating their manufacturing and sales processes, but neglect investing time to find, interview, and hire top talent. Reviewing your existing hiring processes should deliver better recruits.
Revamp your development process – Organisations should be developing their management teams for superior business performance. The gap between current productivity levels and expected performance is often attributed to a lack of skills.
Too often the wrong employee is in the wrong role and investment is needed for solutions to ensure the right people are matched with the right positions within the organisation. This will go a long way to free up the manager’s time spent on under performers.
Better people management – Effective people management practices get superior results by increasing accountability, retaining and recruiting better people, and developing innovative ways to increase profit.
Even just small improvements can deliver results. When you use people management strategies, you can increase productivity, eliminate underperformance and boost your bottom line.
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