From the Dark Side of Productivity, Part 1 of 2
Due to the nature of what we do as a fulfillment consulting firm, we spend much of our time helping clients improve productivity and reduce costs. We must be ever mindful of the negative side — the “dark side” — of productivity projects. That’s what happens if we don’t take the human factor into account. As someone with 30 years of experience in industrial engineering, I can tell you there’s no way to achieve long-term success in a re-engineering project without considering the effect it’ll have on people.
This week, in the first installment of a two-part series on the negative side effects associated with productivity projects, I’ll reference a retailer’s productivity project gone bad, as well as look back at how an industry expert viewed productivity.
Two recent articles in The Wall Street Journal serve as stark reminders of this reality. The first, “Retailers Reprogram Workers in Efficiency Push” (Sept. 10, 2008) described installations of workforce management software at Ann Taylor Stores Corp. and other retailers. The article pointed out that workforce management systems are “sweeping the industry as retailers fight to improve productivity and cut payroll costs.” Some workers aren’t happy about the trend, the report said, because the systems leave them with shorter shifts, make it difficult to schedule their lives and “unleash Darwinian forces on the sales floor that damage morale.”
The Ann Taylor system tracks the usual productivity metrics: average sales per hour, units sold and dollars per transaction. The system schedules the most productive people during the busiest hours and, because it awards more productive salespeople with favorable hours, it gives employees an incentive to persuade shoppers to buy things. That’s worked, as far as the overall economic goals are concerned. The chain’s director of store operations said it’s helped turn more store browsers into buyers. But the article also noted that it’s resulted in the loss of some veteran salespeople who had developed long-term relationships with customers.