Archive for June, 2010

The Payroll Efficiency Factor(tm)

Tuesday, June 15th, 2010

We have just published a new whitepaper, The Cost of Being Good Enough, which looks at one of the costs for the average organization of having mediocre employee engagement levels.  Many of the researchers, such as Gallup and Towers Watson, have indicated that about one-third of an average organization’s resources is wasted because of having low employee engagement levels.  As a reminder, the research indicates that in the average organization that only 1 out of every 4 employees is engaged; that half are unengaged, and 1 out of every 5 is actively disengaged. 

In our The Cost of Being Good Enough, we introduce a new concept that we call the Payroll Efficiency Factor™.  This is a formula that allows any organization to calculate the financial impact of their employee engagement levels and the amount of work that is not being done as a result.  The formula simply asks the organization to take their percentages of each type of employee (engaged, unengaged, and actively disengaged) and multiply each percentage by a factor and then add them all together.  The resulting Payroll Efficiency Factor™ for the average organization is only 63%.

This means that the average organization of 100 employees, with a payroll of about $4 million, is wasting about $1.5 million!  That is $15,000 per full-time employee per year that is being wasted.  It is work that is being paid for and is not being received.  Of course, the whitepaper helps explain how this happens, but here is one example that is provided in the whitepaper:

This would be like spending $4 per gallon of gasoline, but the hose going from the gas pump to the vehicle is old, cracked and leaky, and by the time the gas actually gets into the tank you are only getting about 2/3 of a gallon of gas instead of the full gallon.  The rest is leaking all over the ground and is wasted.  Would you continue to buy gasoline at this station if you were getting such low returns for your money or would you take action to insure that you were getting your full $4 worth?

We also explore the impact of increasing employee engagement in the organization and the corresponding increase in the Payroll Efficiency Factor™ in the whitepaper.  An increase of 7 to 10 percent on the Payroll Efficiency Factor™ is a corresponding increase in the amount of work that is getting done.  Just imagine getting 10% more work done in your organization at no additional cost; what kind of impact would that have on your organization’s ability to achieve its goals?

The Cost of Being Good Enough is available as a free download in Adobe Acrobat PDF format on our website in the Resources Section.  As always, there is no registration required. 

http://www.resourcedevelopmentsystems.com/articles/articles.html

Make a Great Day!

The Problem with Current Management and Leadership Development

Monday, June 14th, 2010

The following is an excerpt from our whitepaper Training’s Role in Acheiving High Performance.

http://www.resourcedevelopmentsystems.com/articles/articles.html

In most management and leadership development programs the emphasis is placed on a vast amount of things that managers must do in order to be leaders, rather than on what they need to be in order to be successful.  The focus is totally on the manager, rather than on the people that they manage and lead and the results that they should be delivering in order for the organization to be successful.  And rather than focus on the development of the team and the organization, the focus is on the development of the individual.

Most programs also start in the wrong place by training line supervisors and mid-level managers instead of taking a top down approach.  In order to drive high levels of organizational performance, there has to be new mindsets at all levels of the organization.  That means that the top levels of management must be prepared first, and then move down through the organization.  This provides a support structure for the new skills that managers are learning so that they may be successfully implemented.   

But most management and leadership development programs start at the bottom and play around with working up.  Too often participants ask “so are you going to teach this to my manager next?”  Unfortunately, in most cases the real answer is “we’d like to, but probably not.”  But if programs start at the top and work down, then the support structure is already in place, and participants will be more likely to apply what they are learning. 

Yes, there is a huge lack of training for most line managers, and line managers probably have the most impact on employee engagement.  This certainly needs to be addressed and we do need to insure that every manager receives training on how to engage employees.  But the research reveals that the actions of top level managers also have a huge impact on employee engagement as well.  And without the strong support system that these managers can provide, line managers will not be able to make the most use of their training and put their new skills into action as effectively, if at all. 

Another issue that most management and leadership development programs face is that they are entirely too scattered.  Instead of insuring that all of the managers of a particular unit are trained so that the entire unit benefits immediately from the training, managers from a variety of units will be sent to the training.  It isn’t uncommon for a large, national organization to put 20 managers at a time through a program with no hopes at all of ever having all the managers in a unit ever being trained at the same time.  This means that little of what is being learned in these programs is ever actually passed on to the day-to-day activities of the manager. 

Finally, most programs provide a major dump of information on the participants in a short period of time, usually two or three days, but sometimes up to a week, at one single time.  Participants are so overloaded with the information learned that they forget a large portion of what they experienced by the time they get back to their workplace, and put even less into action because the programs have nothing set up to insure application of skills after the training session. 

With all of these issues running rampant through most management and leadership development programs, there is no wonder that the research found that these kinds of programs are not providing value back to the organization.  The isolated pockets of success just can’t overcome the lack of impact for the vast majority of participants.  It does no good to provide training when there is too much information, no support system, and no method to insure training application.

Make a Great Day!