HR issues in improvement

Post date: Jun 13, 2016 4:14:26 PM

HR is key to sustainable lean transformation.

The originator of "Lean" Toyota bases it's whole existence on just two principles:

1. Respect for people

2. Continuous improvement

A recent case of lean implementation via an autonomous team of workers at an industrial client had great results on the "hard" metrics:

• Quality "Right first time" up 30%

• Delivery lead time reduced by 73%

• Productivity increased by 1.3% per week over a 36 week period (47%)

The story was different on the "soft" metrics:

Initially as the "Autonomous team" of factory operators formed, cross-trained and then stormed, achieving the hard metrics above, moral went "through the roof" and enthusiasm soared. The operation had been a headache for management in the past; whereas now they just visited once a week for a presentation by the operators of the incredible progress made. Management attention soon focused on the next challenges and the operators began to feel neglected. There was never any tangible reward for their achievements, as the HR system was locked into collectively negotiated inflexible pay-scales with no provision for "Autonomous Teams" of workers, although workers were given the chance to do projects in their freed up time in addition to their normal work. The HR system maintains a great divide between blue collar "Operators" and white collar "Staff". For example new job opportunities for staff are not filled from the pool of talented operators but from outside.

As it became apparent to the operators that there was no career prospects for them despite their great achievement and the risk they had taken embracing new working practices disenchantment set in. The gain is unlikely to be sustained in the long term unless the management team grasp the HR nettle and understand that new ways of working which blur employee categories require new ways of rewarding and retaining the emerging group of bue/white collar team members. 

A massive challenge in any lean transformation is to engage the HR leadership in the process and to ensure three foundations for sustained lean improvement and retention of key technical and improvement competencies:

1. Redeployment guarantee that any productivity improvement made by lean will result in redeployment into useful work for employees surplus to requirement; especially when they have themselves driven the productivity gains.

2. Careers of workers are considered as carefully as for staff with possibility to break through the blue / white collar ceiling.

3. Compensation adequately reflects autonomous work groups and cross trained operators

Only then will the two principles of Toyota work their magical synergy.

1. Respect for people

2. Continuous improvement