The Wall Street Journal, 17 November 2008, reports that “Stores Count Seconds to Trim Labor Costs.”
Companies “break down tasks such as working a cash register into quantifiable units and devise standard times to complete them, called ‘engineered labor standards.’ Then it writes software to help clients keep watch over employees.”
So for example, in some retailers, “A clock starts ticking the instant he scans a customer’s first item, and it doesn’t shut off until his register spits out a receipt.”
Employees who don’t meet performance standards (e.g. they fall below 95%), get called into for counseling, training, and “various alternatives” (i.e. firing).
The result is “everybody is under stress.”
So, is this workforce optimization or micromanagement? Is this helping employees learn do a better job or is this just scare tactics geting them under the management whip?
Some employers are claiming improved productivity and cost savings:
One retailer, for example, claims saving $15,000 in labor costs across 34 stores for every one second shaved from the checkout process.
But others are finding that customer service and employee morale is suffering:
Check clerks are not as friendly. They don’t chat with customers during checkout. Cashiers “avoid eye contact with shoppers and generally hurry along older or infirm customers who might take longer to unload carts and count money.”
Additionally, as another cashier put it, “when you’re afraid you’re going to lose your job, you make more mistakes.”
Other employees are gaming the system to circumvent the rigid performance measures and for example, improving their time by hitting the suspend button to stop the clock more than they are supposed to—it is meant only for use when remotely scanning bulky merchandise.
The other problem with the engineered labor standards is that they often don’t take into account the “x factors”—the things that can go wrong that adversely affect your performance times. Some examples: customers who don’t have enough cash or those “digging through a purse,” credit cards that don’t swipe, “an item with no price or item number,” customers who forget something and go back or those that ask for an item located at the other end of the store.
It seems obvious that while we need to measure performance, we need to make sure that we measure that right things and in the right way.
What good is measuring pure speed of transactions to “boost efficiency” if at the same time we
- alienate our customers with poor service or
- harm employee morale, integrity and retention with exacting, inflexible, and onerous measurements?
Like all sound enterprise architecture efforts, we need to make sure that they are reasonable, balanced, and take into account not just technology, but people, and process.
In this case, we need to ensure the process is customer service driven and the employees are treated fairly and humanly. Without these, the productivity savings of engineered labor standards will be more than offset over time by the negative effects to our customers and employees.