Real World
Easing the pain of reengineering
A recent issue of The Wall Street Journal noted that in a reengineering
environment it is necessary for company leadership at all levels to commit
to working side-by-side with employees to create an atmosphere where employees
are able to help shape their new environment and cope with the disruption.
The following suggestions for managers will help employees emerge from the
reengineering process stronger both personally and professionally, thereby
giving the organizations greater promise of a more competitive future:
- Make your organization a bulls-eye for headhunters. Managers can no
longer promise lifetime employment, but they can promise to make their employees
very employable.
- Keep no secrets. Business leaders must share more about the business
than they might have felt comfortable with in the past. This needs to be
done to help establish the trust between management and employees that is
necessary to heal the wounds of reengineering.
- Make your vision a jointly owned commitment. An honest, two-way interchange
of meaningful information must take place between the employees and management.
- Show some (real) guts. Leaders must demonstrate vulnerability, culpability
and candor if they expect their employees to respond with honesty, innovation,
calculated risk and trust. Leaders must admit to not knowing all the answers
and be willing to ask for help and critical feedback. Leaders must take
responsibility for what has gone wrong. Finally, good leaders create forums
to have candid discussions with the work force.
The bottom line that companies must realize is that successful organizations
will emerge when action is taken to minimize the pain of reengineering and
prevent it from turning into something worse-cynicism, disloyalty and distrust.
Manufacturers plan employment and spending cuts
Many manufacturers plan to cut back slightly on employment and drastically
reduce capital spending growth in 1996, according to a survey conducted
by the National Association of Purchasing Management (NAPM).
The Wall Street Journal reports that survey respondents were less optimistic
about the first half of the new year than at anytime in the past five years.
The survey group expects revenue for all of 1996 to grow by 4.8 percent,
down from 7.4 percent this year and 21.8 percent in 1994.
In addition to lower revenue growth, purchasing managers expect labor and
benefit costs to grow at a rate of 3.7 percent in 1996. The respondents
forecast that manufacturing employment will decline in 1996-19 percent expect
an increase in workers, while 34 percent predict a decrease.
On the bright side, survey respondents do not expect the economy to slide
into recession in '96, and they are forecasting a rise of only 0.5 percent
in the price of their supplies.
However, the overall sluggish outlook forecast by respondents dovetails
with the closely watched monthly NAPM reports of business conditions. For
the past four months, reports have shown a slowdown in manufacturing activity.
This damper on production is attributed to a fall-off in consumer spending.
To compensate for the numerous factors adversely affecting the manufacturing
industry, survey respondents claim that capital spending will be increased
by only 1.3 percent in 1996, down from 9.3 percent in 1995. Normally, a
sharp drop in capital spending foreshadows a recession, but this is not
expected to be the case in 1996 because companies remain optimistic enough
to steadily pick up the pace of building expansion and new construction.
The survey also showed that many purchasing managers plan to reduce their
purchased inventory-to-sales ratio in 1996.
Companies sense employee salary dissatisfaction
In a recent "Genesis Compensation" survey conducted by Tompkins
Associates, Inc., only 10 percent of business respondents believe that their
non-management employees are satisfied with their current compensation.
From these findings, Tompkins maintains that most organizations need to
identify innovative compensation strategies directly linked to improving
the organization's performance. However, judging from the survey responses,
Tompkins claims that many companies do not understand how to properly implement
a performance-based compensation plan. The following results illustrate
this point:
- Only 21 percent of companies participating said that their employees
believe their pay is related to performance.
- Ninety-three percent of the companies do not have a recognition program
that fully supports employees' development and their need for feedback.
- One-fifth have a pay-for-skill element in their rewards plan, while
only 25 percent are utilizing some form of a competency-based development
approach.
- Sixty-one percent of the companies do not have an ongoing process to
review and improve their compensation systems.
The survey was conducted over a three-month period, and more than 1,700
people in industry were surveyed at their workplace. Tompkins contends that
as organizations continue to strive for meaningful approaches to peak-to-peak
performance, what is needed is not a refinement of traditional compensation
systems, but a shift to a whole new approach to compensation.
For more information on Tompkins' new free monograph, "Shifting from
Traditional Compensation to Genesis Compensation," and/or a complete
survey response summary, contact: Information Services, Tompkins Associates,
.
AutoSimulations on the web
AutoSimulations, a simulation and scheduling software provider, has opened
a site on the World Wide Web. The web site provides product information,
customer support from qualified technicians, consulting services from expert
engineers, worldwide regional sales contacts, product tips and a section
for career opportunities within AutoSimulations. Access to AutoSimulations'
web site can be made through any Internet Web browser via http://www.autosim.com.
Copyright © 2020 by the American Production and Inventory
Control Society Inc. All rights reserved.
Click here to return to the table
of contents.