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Keys to the productivity of technical employees.

In this era of increasing global competition, limited financial resources, downsizing and shortages of qualified technical personnel, managers should be more concerned than ever about individual and organizational productivity. There is, of course, no shortage of advice on how to manage more effectively. The problem is that we know relatively little about what actually works. To shed some light on this issue, we developed and administered a survey designed to assess the effectiveness of various practices in managing technical employees.

The survey and data analysis

Surveys were mailed to a total of 2,000 engineers and engineering managers. Slightly more than 500 responded. The survey asked respondents to indicate how frequently each of 21 management practices was used in their organizations. The second part of the survey included a measure of the degree to which respondents believed their job situations enabled them to be as productive as they could be. The correlation between this measure and each of the twenty-one management practices provides an indication of the relative impact of each practice on productivity. Combining the frequency and impact measures produces a 4-celled matrix revealing those areas where it might be profitable to invest additional resources and those where the resources might better be spent elsewhere.

Before presenting the analysis of the matrix, it is worth noting that the survey strongly suggested that there is room for productivity improvement. Only 11 percent of the non-managers and 12 percent of the managers indicated that they were as productive as they could be. To varying degrees, all of the other respondents believed that there were things in their job situation that inhibited, or at least did not foster, productivity.

What works and what does not

In the upper left-hand corner of the matrix are those management practices that could have a high impact, but are currently used only infrequently (high/low). These are the areas that appear to have the most potential for enhancing productivity and where additional resources might be most profitably invested.

Note that each of the practices in high impact/low frequency quadrant requires a high degree of interaction between managers and subordinates. This may explain why these practices are implemented so infrequently. Truth be told, many managers, particularly those coming from engineering backgrounds, prefer to spend their time working on technical problems. They often lack interest and experience in dealing with the human side of enterprise, and may have a tendency to place these responsibilities on the back burner. This tendency is further exacerbated by the fact that managers in technical areas frequently face tight deadlines and are often confronted by "crises" of one kind or another.

These impediments to managers working more closely with their subordinates can probably be overcome only by introducing some degree of structure into the process. Simply imploring them to devote more time to one-on-one interaction with their subordinates is not enough, given the array of forces working against it. It is probably necessary to introduce a more or less formal system like management by objectives (MBO).

MBO involves managers and subordinates collaboratively defining goals and objectives, establishing performance standards and periodically reviewing the employee's progress. If properly implemented, this process could address several of the issues raised in the first cell of the matrix (e.g., presenting information about organizational goals and objectives, planning special job assignments, providing feedback and tying compensation to performance). The process cannot be conducted in a mechanical fashion, however. To have an impact, it must involve genuine dialogue between managers and subordinates.

The MBO process should start with the employee being asked to develop a list of goals and objectives along with projected resource requirements. It is important that the employee's goals identify the specific results he or she expects to achieve. Vague or ambiguous goals simply do not provide an adequate basis for planning, so the supervisor should press for clarification if the subordinate fails to define precisely what he or she hopes to accomplish.

It is also important that the goals be reviewed to ensure that they are reasonable. Although supervisors should encourage their subordinates to stretch by taking on increasingly more challenging assignments, the MBO process will be counter-productive if employees view themselves as failures because they failed to achieve unrealistic goals. It is better to tone things down at the outset than to have to backpedal during subsequent evaluations.

In addition to establishing clear and realistic goals, it is vital to define the standards that will be used to evaluate performance. If possible, the standards should be defined in terms that make them measurable. Relative terms, such as adequate or sufficient, should be replaced by specific numbers or ranges. For example, a goal like "improving turnaround time for repairs," should be restated to specify that "all repairs are to be made within x hours."

Finally, it is important to set deadlines and define milestones that can be used to track progress along the way. This is important because it allows the subordinate to gauge how well he or she is doing during the review period. Milestones also enable the manager to take corrective action, if necessary, before things get too far out of hand.

The goal-setting meeting itself should be viewed as an opportunity for the supervisor and subordinate to develop mutual understanding of the results the employee is expected to achieve. To accomplish this, both parties must be actively involved in the discussions. The following suggestions are offered as a guide to managing this process:

* Be sure to give the subordinate ample opportunity to adequately define his/her goals and to explain his or her perspective. Do not begin to define a plan of action before the rationale behind the goals has been adequately described; and

* Focus on asking questions rather than giving advice. Use active listening techniques. Encourage subordinates to think through the implications of the things they are proposing.

It is essential that the session conclude with a mutually agreed upon plan of action. The following questions might be asked at the close of the session to assess whether this has been accomplished:

* Are we in complete agreement about the goals to be achieved?

* Do we both have a clear understanding of the steps to be taken to achieve these goals? Have the requisite resources been allocated? Are both parties committed?

* Have we established deadlines for completing various steps and have we set dates for getting back together?

In addition to addressing the specific concerns raised in our survey, this process could also go a long way toward achieving the broader goal of employee empowerment. Empowerment means giving employees the autonomy, authority and control necessary for them to take charge of their work. The goal of empowerment is to encourage employees to take responsibility for their own destinies. The hope is that they will stop perceiving themselves as victims and begin to actively contribute to the organization in spite of sometimes difficult circumstances.

Finally, although MBO is generally thought of as a one-on-one activity (or process), in some circumstances it should be structured so as to involve everyone concerned with the development of a particular product or service. This team approach to MBO is particularly appropriate in the context of concurrent or parallel development.

In the upper right hand corner of the matrix, we find high impact practices that are already in frequent use (high/high). These practices are paying off and should receive continued support.

Given the group surveyed, it is no surprise that these factors were in evidence. Note that all of the items in this quadrant are tied to the work itself; they are more or less built into the job. What the survey captured, then, is the fact that most contemporary engineering jobs are intrinsically quite rewarding.

Engineering and professional work often involves a continuing series of challenging job assignments. This can be a real boon to technical managers if they recognize the benefits of managing professionals in an enriched work setting and resist the temptation to micro-manage. Actually, these high/high factors fit in nicely with current trends toward downsizing and flatter organizations. Reducing bureaucracy requires greater delegation of responsibility and authority, less micro-management, and fewer review levels. Such changes could make engineering and technical work even more professional and, in the process, more productive.

In the lower right hand corner of the matrix are those practices that do not have a substantial impact, but are used frequently nevertheless (low/high). It might be wise to reexamine their use.

The first item, time to master responsibilities, requires striking an appropriate balance between too much and too little time on a given job or assignment. Sometimes people are left in a job for an extended period to allow them time to grow. Although this strategy may produce the intended result if the individual actually needs additional experience, it can backfire if not closely monitored. As the manager of an antisubmarine torpedo development group, for example, one of the authors assigned a bright young engineer responsibility for torpedo weight and balance. This was a task requiring great accuracy and care, and the young engineer approached it as an opportunity to make a real contribution. However, a visit to the laboratory five years later revealed that this individual was still working on the same assignment! What had started as an opportunity for professional development had become a dead end job.

The opposite can also be true, of course. Some people are moved to new responsibilities too soon, before they have mastered their current assignment. The stress that results can be just as debilitating as being left on an assignment too long.

Profit sharing plans, the second item in the high frequency/low impact quadrant, may not contribute to enhanced productivity because they are viewed as unfair, are too complicated or too far removed from individual contribution. They can be effective, however, if properly implemented. The Scanlon Plan, for example, has a proven track record extending over 30 years in both small and large organizations, with and without unions.

The Scanlon Plan is essentially a philosophy, a theory of organization and a set of management principles all rolled into one. It has two main elements that, when combined, can provide a viable framework for both individual and organizational development.

Element 1: Teamwork. A system must be established to coordinate the efforts of labor and management in the identification, development and implementation of improvements. The typical Scanlon Plan accomplishes this through an open suggestion system and a labor/management committee structure. These committees deal exclusively with operating improvements and are not concerned with grievances, wages, etc. Their typical charge is to encourage, evaluate, act upon and communicate suggestions for improvements.

Element 2: Rewards. A related system must be worked out that will distribute the economic rewards that result from the improved productivity. The reward system must be easy to understand, the bonuses should be paid monthly and the system must fit the company situation. The typical Scanlon Plan establishes a standard ratio for total labor costs divided by total value of production. Any reduction in total labor costs (as determined by this ratio) is shared between the owners and all employees, usually with 75 percent going to the employees. These bonuses usually run between 5 percent and 20 percent of payroll.

The final cell of the matrix consists of those factors that appear to have little impact on productivity and are used only infrequently (low/low). These factors do not seem to have much leverage for this class of employees. They should not be dismissed out of hand, however. Each factor did show a positive correlation with the productivity measure. Moreover, these factors may have an impact on other variables not measured in this study (e.g., loyalty and commitment).

Notice that the items in this quadrant are all somewhat removed from day-to-day operations. Most of them are oriented toward the long term, generally beating more upon the progress of an individual's career than the job at hand. As a result, they may lack immediacy in motivating current performance. Over the longer term, however, they may well influence the individual's propensity to stay with or leave the organization.


The survey suggests that there is considerable room to enhance the productivity of technical employees. It appears that the greatest opportunities lie in improving the quality of the interaction between supervisors and subordinates. More specifically, the survey indicates that increased management support in the form of greater sharing of information, increased performance feedback and planning special job assignments may provide the greatest immediate return.

Since it is often difficult for supervisors to devote adequate time to one-on-one interaction with their subordinates, it is probably necessary to introduce some degree of structure into the process. MBO is a more or less formal system involving managers and subordinates collaboratively defining goals and objectives, establishing performance standards and periodically reviewing the employee's progress. If properly implemented, this process could address several of the issues raised in the survey. It cannot be implemented in a mechanical fashion, however. To have an impact, MBO must involve genuine dialogue between managers and subordinates.

The survey also suggests that the work itself can play an important role in enhancing the productivity of technical employees. Engineering jobs often provide challenging job assignments and can afford substantial opportunity for professional growth and development. This potential can be fully realized, however, only if technical managers recognize the benefits of an enriched work setting and resist the temptation to micro-manage.

As a rule, the management practices that seemed to have the least impact on employee productivity were either oriented toward the long-term or otherwise removed from daily operations. With many gain sharing plans, for example, it may be difficult for employees to see the connection between their individual contributions and the rewards that are shared in the end. These practices should not be dismissed, however, as they may very well have a positive impact on such factors as employee loyalty and commitment to the organization. In addition, they may help to establish an environment that makes such practices as parallel development, down-sizing and just-in-time production more effective.

Theodore Gautschi, Ph.D., is a professor of management at Bryant College, Smithfield, R.I. He a holds his doctorate in management from the University of California, his M.S. in industrial management from the Massachusetts Institute of Technology (where he is a Sloan Fellow) and his B.S. in electrical engineering from the University of California at Berkeley. Gautschi has more than 30 years of experience in management with high-technology companies and agencies in the U.S. Roger Anderson, Ph.D., is chairman of the management department at Bryant College. He holds an undergraduate degree in business administration from Augustana College, an M.B.A. from the University of Wyoming and a Ph.D. in management from the University of Oregon. He is an expert on employee law and has served a number of organizations as a consultant on human resource issues.
COPYRIGHT 1993 Institute of Industrial Engineers, Inc. (IIE)
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Management Strategies
Author:Gautschi, Theodore; Anderson, Roger
Publication:Industrial Management
Date:Jan 1, 1993
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