In my area, outside of general incentives like profit sharing, there are relatively few, if any companies, who offer any kind of incentive outside of base pay in skilled manufacturing. For general labor manufacturing, such as Ashely Furniture, they often offer a base rate + a production bonus. It doesn't happen often, but it has happened, where I've lost good employees because they would rather work the low skill, low responsibility job where if they haul ass, they could slightly exceed the base wage I might be paying them currently (even though the pay scale they're on would exceed anything they could make with production bonuses after a couple years). That's rare, but it has happened.
Anyway, I'm curious if other shop owners/managers offer their machinists or skilled tradesmen anything in the way of incentive past their hourly rate. I don't mean one time windfalls, like they really pulled it out for you on a particular job/month so you gave'em a $500 thank you, but a documented, scheduled incentive program based on some metric of performance.
I ask, because I'm going to propose something like this to our management team for our group of machine programmers. These individuals are responsible for programming, developing setups, sourcing tooling, staying on top of tooling technology or bringing new technology in to the shop. Another responsibility of theirs, is to improve current machining processes to effect the bottom line: i.e. reduce a cycle time to increase capacity at a workcenter, source 1 tool that might replace 3, etc.
This responsibility has generally exempted them from the "extramile program" that other, lower skilled employees could historically participate in, where they might submit an idea to save time or money, and get rewarded if it is valid and implemented. That didn't bother me for a time, because the reward was small, and the program was not husbanded very well by management. However, that is changing, and the program I believe will become a much more effective tool for improvements, as well as more rewarding for employees, in the future.
So now it does bother me. These programmers might make somewhat higher wages, but they more than proved their worth last year, saving the company hundreds of thousands of dollars, perhaps even millions if you consider their efforts to improve a process on a job we may have lost if they were not able to reduce our internal costs to produce it.
I happen to believe that is worth more than a few dollars an hour more on a pay scale than the machine operators who are not in a position to make the same contribution, and who would be rewarded on a graduated scale if their idea netted the same result.
So I am going to propose a clear definition of what is expected from this group of employees, say, 10% of their annual earnings, which would not be a hard measure to achieve given their past performance. And if they exceed that amount, to reward them on a percentage of savings basis, similar to how a salesman might get a commission based on net sales on top of his annual salary. In talking to my guys, they like the idea, but I was happy to see that they suggested that they be evaluated as a team, rather than individually. I was glad they came to that conclusion since I was worrying over "incentive sniping" or losing the open cooperation between individuals that we currently have. Team based incentives eliminate that, as well as trying to parse who is responsible for what when a number of individuals work on a project.
What do you think? As a manager/owner, or as an hourly machinist?
Anyway, I'm curious if other shop owners/managers offer their machinists or skilled tradesmen anything in the way of incentive past their hourly rate. I don't mean one time windfalls, like they really pulled it out for you on a particular job/month so you gave'em a $500 thank you, but a documented, scheduled incentive program based on some metric of performance.
I ask, because I'm going to propose something like this to our management team for our group of machine programmers. These individuals are responsible for programming, developing setups, sourcing tooling, staying on top of tooling technology or bringing new technology in to the shop. Another responsibility of theirs, is to improve current machining processes to effect the bottom line: i.e. reduce a cycle time to increase capacity at a workcenter, source 1 tool that might replace 3, etc.
This responsibility has generally exempted them from the "extramile program" that other, lower skilled employees could historically participate in, where they might submit an idea to save time or money, and get rewarded if it is valid and implemented. That didn't bother me for a time, because the reward was small, and the program was not husbanded very well by management. However, that is changing, and the program I believe will become a much more effective tool for improvements, as well as more rewarding for employees, in the future.
So now it does bother me. These programmers might make somewhat higher wages, but they more than proved their worth last year, saving the company hundreds of thousands of dollars, perhaps even millions if you consider their efforts to improve a process on a job we may have lost if they were not able to reduce our internal costs to produce it.
I happen to believe that is worth more than a few dollars an hour more on a pay scale than the machine operators who are not in a position to make the same contribution, and who would be rewarded on a graduated scale if their idea netted the same result.
So I am going to propose a clear definition of what is expected from this group of employees, say, 10% of their annual earnings, which would not be a hard measure to achieve given their past performance. And if they exceed that amount, to reward them on a percentage of savings basis, similar to how a salesman might get a commission based on net sales on top of his annual salary. In talking to my guys, they like the idea, but I was happy to see that they suggested that they be evaluated as a team, rather than individually. I was glad they came to that conclusion since I was worrying over "incentive sniping" or losing the open cooperation between individuals that we currently have. Team based incentives eliminate that, as well as trying to parse who is responsible for what when a number of individuals work on a project.
What do you think? As a manager/owner, or as an hourly machinist?