The acrid aroma of burning rubber

26 Apr

I’m overwhelmed with a virtual stinky rubber smell just reading this Harvard Business brief case, Treadway Tire Company: Job Dissatisfaction and High Turnover at the Lima Plant. The phantom smell is symptomatic of the problems at the plant, which are multiple. Human Resources Director Ashley Wall needs to identify the root causes of line foreman turnover, and present a plan to resolve it. Stepping into Ashley’s rubber-soled work boots, here’s what I identified as the root causes:

  • Lack of training and preparation for new line foremen
  • Weak support from their superiors: general supervisors and area managers
  • Lack of firing authority/ability to impact union grievances
  • Burden of 12-hour shifts
  • Too many roles for line foreman/too many targets to meet
  • Apparent unresponsiveness of other managers – why is equipment not working at beginning of a shift?
  • Failure of supervisors/managers to act upon line foremen’s requests/suggestions
  • More effort expended on testing potential hires than training actual hires
  • High level of specialty knowledge required

Here’s a mini-breakdown of line foreman turnover by category:

  • Overall turnover = 46%. Almost half leave within one-year period.
  • External hires = a whopping 75% turnover! Half leave voluntarily, half involuntarily.
  • Internal hires = 40%. However, 62.5% of these leave Treadway involuntarily. Meaning that more than three-fifths of employees who were successful enough to get promoted get fired within a year? This points to major systemic problems, probably correlating to issues above.
  • Transfers = 50%. This could be really, really concerning. Half of the transfers from within Treadway leave? However, the sample size is small – only 2 – so this is one is least concerning of the three. However, it should be assessed again using more data.

So how should Ashley plan to address the issues and lower line-foreman turnover? She might want to explore the following in her plan:

  • A detailed budget analysis. The budget has been cut, leaving no money for training. But what is the cost of constantly hiring? Develop a variety of forecasts to show that hiring constantly to account for turnover rate costs more than training would. Forecast losses in productivity, increased time devoted to union matters, increased time for more FLT testing, etc. While only a hypothesis at this point, all this hiring has to cost more than training. Develop the data to prove it.
  • External or college hires are the MOST likely to fail. Turnover is 75 percent within one year. However, it’s important to continue to bring in college-educated potential managers. Propose a temporary moratorium on specifically recruiting external line foremen. Presumably, it costs more to recruit these people as well. Once internal problems are alleviated, the external program could begin again.
  • Focus training on general supervisors/area managers FIRST. These people seem to create the greatest impediments, are the least responsive, and have the most ingrained behavior. Make them share in all targets the line foremen have: We succeed or fail as team. Change needs to come from the top down. Focus on this group heavily first, then roll out …
  • Training for line foremen. Follow Ashley’s original training outline, and add modules in specialty knowledge. Continue sporadic specialty knowledge sessions throughout the year.
  • Review union grievance processes. See if there are ways line foreman can be involved in follow-up and firing decisions.
  • Consider shift adjustments. There were several references to 12-hour shifts causing illness as well as lateness. Twelve-hour shifts work great for some people – they like three days off – and not for others. Perhaps employees could have the option of whether to work 12-, 10- or 8-hour shifts. This keeps costs down and factory running 24/7, but also gives employees leeway. This type of scheduling option is commonly used in acute hospitals, which have roughly the same scheduling issues.
  • Consider giving hourly staff more say. Perhaps they can self-schedule, which would relieve line foreman. (This technique is also used in hospitals.) As Jürgen Dormann of ABB recommends, ask hourly employees for suggestions on scheduling, productivity, broken equipment and other issues. This could also lower the number of grievances over time and help foment better management/union relations.
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