This article is the third in a series of discussions (see links below) on workforce development in the post-pandemic era. Some key points from the previous two installments include the fact that, going forward, industrial operations will need to include a focus on the people-side of the business from a strategic perspective. And they will need to do more with less of everything while developing new habits regarding strategic workforce development. Moreover, shaping the new workforce into the most productive, positive, and enthusiastic group of employees ever will require top management and front-line leaders to rethink many crucial issues. As I’m pointing out in this article, that will include rethinking basic workforce-related financial strategies. Read on to learn why.
The post-pandemic development of new work and workers must go beyond merely building new skills and knowledge. As new skills and the related know-how and know-when and know-where aptitudes are acquired, there is a human need for rewards, recognition, and financial compensation for accomplishments. Here are some proven approaches.
RETHINKING INCENTIVES, BONUSES, AND CERTIFICATIONS
Attracting, training, and retaining a new and vibrant workforce with the skill sets for today and into the future requires new and vibrant personnel strategies. Among them are a variety of reward and recognition approaches, including incentives, bonuses, and certifications.
BONUSES: One-time financial incentives to attract or recruit new employees are “signing bonuses.” A payment is promised to new qualified employees for targeted jobs after completing a period of employment.
For years the healthcare industry in our region of the U.S. has offered hiring bonuses of $1,000 to $5,000 to attract new nursing assistants and nurses. In other regions, it’s not uncommon to see signing bonuses, recruitment bonuses, and continuation bonuses, all designed as incentives to attract and retain capable skilled employees.
Businesses, though, are now incentivizing current employees to seek their new workmates by offering recruiting bonuses. For example, one organization in western North Carolina is distributing cards to current employees offering $1,000 “sign-on bonuses” for new employees. When a new person is hired in this program, the recruiting employee receives a $5,000 bonus. This encourages employees to help keep the business humming along while sharing in the incentive previously paid to the new employee.
One-time bonuses can be much better than offering higher hourly wages in that they don’t affect the employee’s base pay rate and the associated annual cost-of-living increases. This type of bonus is a one-time incentive that can be employed periodically for performance and/or annual renewal of employment. While bonuses aren’t reflected as employee pay rate or salary level, they are part of the employee’s total compensation received.
RECOGNITION: Certifications awarded to employees as they achieve new milestones on job training plans or career paths are a form of recognition. Certificates of achievement can be company-specific forms of recognition or provided by third-party certifying organizations. Here are examples of third-party recognition: The Society of Maintenance and Reliability Professionals (SMRP) offers three types of certifications: Certified Maintenance and Reliability Professional (CMRP), Certified Maintenance & Reliability Technician (CMRT), and Certified Asset Management Assessor (CAMA) programs.
♦ The CMRP program is the leading credential for certifying the knowledge, skills and abilities of
maintenance, reliability, and physical asset management professionals.
♦ The CMRT program is the leading credentialing program for the knowledge, skills and abilities of
maintenance and reliability technicians. The certification assesses the knowledge and skills of
those responsible for preventative, predictive and corrective maintenance, i.e., multi-skilled
individuals who play a critical role in the success of organizations worldwide.
♦ The CAMA program was developed by SMRP and several international partners to assess an
individual’s qualifications to be an auditor of asset management systems.
RETHINKING COMPENSATION: PAY FOR APPLIED SKILLS
How employees are paid for their work can be based on tradition or as a foundation for the future of workers and work. Employee compensation must be considered when planning new workforce development strategies. Old compensation plans based solely on seniority for example can undermine upgraded employee development programs and defeat the desired skills performance improvements.
Employee compensation influences the retention of top-skilled people, motivates employees to master new skills, and helps a business attract promising job candidates. On the other hand, compensation can also be a discouraging factor for skilled employees who are topped-out in pay and have no path to advancement (especially if they’re expected to master new skill sets for the future).
A “pay-for-applied-skills” compensation plan could help overcome that situation. In this type of plan, employees’ pay is based on the skills and knowledge they apply on the job, rather than on the pay rate of the job classification they hold. The difference? The business is paying for what an employee accomplishes on the job. Higher-skilled employees earn more per hour than those who perform at the minimal expected levels.
Consider this example: Many of the 165 maintenance employees at a manufacturing plant were “high seniority” and at top pay in their traditional pay plan. They had been topped out for years. Regardless of the skills or the job classification, most of these maintenance employees were paid the same hourly rate. That meant lubricators and truck mechanics were paid the same as instrumentation and control (I&C) technicians and journeyman-level millwrights, thanks to a four-year time-in grade pay plan. In this highly automated plant, the I&C technicians and millwrights clearly added more value to equipment reliability and plant performance than truck mechanics and lubricators. Truck mechanics and lubricators were also essential to the operation, but in plentiful supply and easily trained. I&C technicians and millwrights were a scarce resource, and it took years to develop those types of skills.
A second problem in this case was one of “motivation.” How could you possibly encourage people to learn and apply new skills for improving reliability if they felt that there was “nothing in it for me.” New employers in the area were recruiting those top-skilled technicians and millwrights with higher pay and opportunities for advancement. A third problem was the difficulty in recruiting new, higher-skilled maintenance technicians. Under the existing system, there were minimal chances for advancement and no provisions for starting out at a higher than entry-level pay.
So, how was the “pay for applied skills” program developed at that plant? It began with a comprehensive definition of the skills and knowledge required to perform the maintenance jobs in the plant. This listing of “job-performance requirements” was developed using a duty/task analysis process. (Caution: Don’t try to take a short cut with this step ,as it is prescribed in the “Federal Uniform Guidelines for Employee Selection Procedures.”) The duty/task analysis also provided a valid and fair way to assess employees’ skills and knowledge, structure on-job and classroom training programs, and assess the skills and knowledge of prospective employees. The next step determined the advancement requirements, or criteria, and dollar value of each pay level in the new plan.
Another important consideration at this plant was not to develop a “general skills advancement plan,” where everybody had to have the same skills and knowledge to advance. Here was an opportunity to structure the new pay plan to emphasize the skills and knowledge necessary to improve and sustain new levels of equipment performance and reliability into the future. Here was the chance to develop a “multi-skilled” maintenance work force.The success at this plant was a true “win-win” situation: The business won through training and qualification of maintenance employees to perform the tasks that truly made a difference. The employees won by learning to do what they were interested in doing.
But what about maintenance employees who don’t want to learn and apply new skills (and you will always have some)? If they are good employees, performing needed tasks on the job, they can fit into the plan at a level that matches either their current pay or the skills and knowledge they have.
The downside of a pay-for-applied-skills plan, and probably the biggest barrier to this effective compensation system, is two-fold: It’s different. And it takes a little more time to administer than old time-in-grade job classification systems.This compensation approach, however, may be just what your organization needs to breathe new life into a pay and progression process based on skills and knowledge of the last century.TRR
PUTTING THE WORKFORCE-DEVELOPMENT PIECES TOGETHER
The RAM Review has published numerous discussions (by way of newsletter columns and feature articles) on the topic of training and workforce development. Here’s a list (with links) of several such items under my byline, including the referenced first two installments of the current discussion. . . B.W.
ABOUT THE AUTHOR
Bob Williamson is a long-time contributor to the people-side of the world-class-maintenance and manufacturing body of knowledge across dozens of industry types. His background in maintenance, machine and tool design, and teaching has positioned his work with over 500 companies and plants, facilities, and equipment-oriented organizations. Contact him directly at 512-800-6031 or email@example.com.
Tags: reliability, availability, maintenance, RAM, workforce issues, leadership, training and qualification, skills development