Dec

4

Productivity, from Jeff Watson

December 4, 2009 |

U.S. nonfarm worker productivity jumped at an annual rate of 8.1% in the third quarter, the biggest rise in productivity since 2003.– News Report.

I own a couple of businesses and am constantly trying to increase productivity. One benchmark for productivity is the study of Items Sold per Labor Hour (IPLH). In my mind, this is the ultimate measure, as it's non-inflationary, and cannot be massaged. I also pay attention to Items per Customer and Sales per SQ Foot. I set goals and hold the managers' feet to the fire if the IPLH suddenly dips. I don't mind paying overtime if it is used to generate extra business, and not used to finish work due to slacking. Being retail oriented, when there is downtime, the employees are expected to clean and front the inventory. We pay our employees a little over the market rate and give quarterly bonuses, yet remind them that they are only as good as their last numbers. Still, our turnover is well below the industry standards. Turnover will kill you as it costs me $1600 to train a new employee and get him up to speed.

Jeff Watson, surfer, speculator, poker player and art connoisseur, blogs as MasterOfTheUniverse.

Kim Zussman adds:

Possible ways to increase productivity:

Produce more with less
Produce more with the same
Produce a lot more with a little more
Produce the same with less
Produce less with a lot less

For those still employed, fear would seem to be a good motivator to work harder/more efficiently. Especially those making less than the Holy Ceiling of $250,000 per year.


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