MRO Magazine

Link strategy targes for improve performance


November 14, 2000
By PEM Magazine

Imagine a job where on any given morning you have no idea what fires will be burning — that is, what work you will be doing that day or any subsequent day.

Imagine also not knowing whether what you do end up doing, has been done well or poorly, according to your supervisor and others.

Working in this constant fog can be very disconcerting, even if you do end up getting used to it. These are the realities of operations, however, for many workers and even their supervisors. Clearly, the morale and performance of the department suffer over the long term as a result.

The solution is easy to articulate but very difficult to implement. More planning is required, from long-term strategic planning to better day-to-day planning and control. This creates a level of expectation about what and how work should be done. Furthermore, performance and remuneration should be based, at least in part, on how well those expectations are met.


The following steps describe how to bridge the higher-level strategic planning process, with the grass-roots motivation and performance evaluation of individuals. It takes into consideration both the requirements of the operations manager — implementing the planning process smoothly — and of the plant workers:

1. Set performance targets for the department.
The first step is for operations to go through the strategic planning process, setting goals and objectives for the long term. Then, establish measures or indices that will reflect the level of performance regarding each goal and objective. The current value of each measure is then determined.

Targets must be set which exhibit a graduated improvement over the long term. Take care to obtain ideas and commitment from all levels, from worker to management, in operations and other stakeholder groups such as engineering and maintenance. Performance will be judged based on how aggressive the targets are, and how well the targets are met.

2. Prepare action plan to meet targets.
To prevent targets from becoming simply numbers pulled out of the air, action items are created in light of strategic goals and objectives. The action plan describes how targets will be met.

For example, if one target for this year is to improve productivity by 10 percent, action items include introducing a lean manufacturing program, initiating a training program for key equipment operators, installing a robotic work cell, and so on.

3. Determing tasks, skills and occupations required to implement action plan.
The action plan may change the quantity and type of work that is required, which in turn, may demand different skill sets.

Thus, it may be beneficial to take an inventory of all the tasks that are currently done and will be done by the operations department. Then, classify each task as to skills required to perform the task, and the level of difficulty.

Next is the monstrous task of regrouping the tasks into logical jobs and occupations. This exercise should be done jointly by workers and management, to achieve a buy-in at all levels. Note that multi-skilling can easily be an outgrowth of this process.

For example, suppose there are many job categories such as setup person, material handler, and machine 1 operator. After studying the basket of skill requirements, you may be able to regroup the tasks into two occupations called "Operator I" and "Operator II", with three job categories in each — A through C.

4. Establish quality and performance standards. For each task defined above, you must set quality standards. The subjective nature of responses to questions such as "what is the expected quality of output for my job?" can make this step difficult, but certainly possible. Where applicable, time standards should then be established.

5. Measure performance using information systems. Once tasks are defined and standards established, shop-floor data collection and ERP systems can be used to help track how well individuals, groups of individuals, and the whole department are meeting those standards.

The danger, of course, is to use the performance reports to discipline an individual, as this will surely mark the end of accurate recording of labour hours.

It is far better to reward better-than-standard performance than to punish substandard effort. In my experience, you do not need information systems to recognize that an individual is not performing. As well, if you concentrate on the performance of teams, geographic areas, departments, etc., peer pressure will ensure that an individual’s performance is kept in line.