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Published May 2002

Company performance starts with employees

Q. I recently was appointed general manager of a large distribution warehouse. Although it is a state-of-the-art facility, with the most sophisticated technology in the industry and run under strict Total Quality Management standards, never in four years has it reached its financial targets or TQM objectives. Customer dissatisfaction is rampant, and employee morale is best illustrated by last year’s turnover rate of 25 percent. What suggestions would you make to help reverse the performance of our unit?

A. The scenario you describe reminds me of a very similar situation encountered at a large regional food distribution warehouse in Georgia. I had the good fortune of hearing how a new management team drastically changed its hiring practices and turned around the facility’s performance.

The new management team set out to take a team-oriented approach to warehousing. Previously, management had followed a policy of hiring college graduates to fill line positions on the theory they would be better suited to operate the complex supply-chain technology within the facility. The new team reasoned that having a crew of economic and philosophy majors driving forklifts, stacking pallets and loading tractor trailers wasn’t working.

The “college graduate” requirement was scrapped and the facility began hiring high school graduates and those with previous warehouse experience. In addition, the team instituted an employee-referral program that encouraged employees to ask friends, relatives and neighbors looking for a job to apply. Many “best practice” employers have found employee referrals are integral to creating a loyal and dedicated work force. They realize that when workers like and identify with their co-workers, conflict is reduced and a “team” environment more easily engendered.

The hiring process became more rigorous. The relaxed, “tell us about yourself” approach was replaced by behavioral interviewing where candidates were asked how they would respond to various operational and personnel challenges that they most certainly would encounter on the warehouse floor.

As the number of job candidates grew, human resources turned the hiring process over to eight managers who were trained and certified in the behavioral interviewing process. Management began conducting employee surveys on a semi-annual basis, and line workers reacted positively to the difference in the new employees joining them on the floor.

In the surveys, employees said they wanted to get more involved in contributing to the changes at the warehouse. In response, several “non-exempt” and hourly employees also were trained and certified as behavioral interviewers.

As word spread throughout the community that the warehouse was a “cool” place to work, applications poured in. To handle the rush, the warehouse created a pre-screening test to ensure only the most qualified candidates entered the hiring process. This technique has been successfully used by Home Depot to fine-tune its hiring process.

Within three years, turnover had been more than reduced in half (11 percent). But wisely, management continued the employee surveys and learned that many newly hired line workers weren’t immediately prepared to assume the “fast pace” of the floor. In response, management created a five-day orientation program using experienced line employees as “mentor/coaches” to show the new hires what was required.

More fine-tuning was necessary. At the employees’ request, managers were required to spend more time on the floor “coaching,” rather than ensconced in their offices. Faced with increased demands from customers, employees formed teams to resolve floor-related snafus without turning them over to management.

The result? In six years, turnover dropped to 1 percent, the warehouse reached its shipping potential and began exceeding its financial goals.

The answer: First get the right people to work in your facility, listen to them, then get them steadily involved in improving operations and solving problems.

Eric Zoeckler operates The Scribe, a business writing service. He also writes a column appearing Mondays in the Business section of The Herald. He can be reached at 206-284-9566 or by e-mail to mrscribe@aol.com.

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