Looking for opinions...

MB1004 · July 2004

We are in a production environment where currently all production employees are classified in levels, such as Assembler I, II, Stop Cutter I,II, etc. Each level is associated with a pay scale based on the job requirements and difficulties. So...if you cap out and want to keep moving up, you have to learn more, transfer, etc.

Our new production manager is in favor of a flat scale, where everyone starts at the same wage, receives the same increases over the first three years, and then the same pay for anything over 3 years of service. There would just be 3-4 different groups to accomodate the different skills of varying jobs. He says this will alleviate the disgruntled employees because any employee doing the same job as another, will know they are making the same and not get frustrated when others are making more because of how long they've been there. There would be no merit raises, nothing tied to performance, everyone would receive the same wage increases.

Any opinions on the pros/cons of the different systems for a manufacturing environment? Your ideas and thoughts would be alot of help.

Thanks!

marc · July 2004

Are you saying everyone within those groups would not be differentiated based on quality of work? Perhaps there is not a difference in units of production, attendance, etc - in general?

I think it is a bad idea. Where is the incentive to do better? Will I get rewarded the same if I have fewer quality rejects than the guy standing next to me? Why should I care about the quality of my work? Is there no added value for loyalty to the company? Perhaps none of these questions produces an answer that would justify people being at different spots in a wage range. If that is the case, why not go for it?

I do have a hard time believing the jobs and the way people do them is so generic that no differentials should exist, but I am not a production expert - other input should give you more to go on.

lnelson · July 2004

I think this would be a bad idea for the co.

You have 2 ees who work there for 3+yrs 1 ee produces and does everything the co asks and then some who makes the same as ee#2 who produces just enough in his 8hrs and could care less for the quality of the product.
Where is the incentive to do better? Performance, attendance, etc. should be basis for increases.

JMO,
Lisa

NM _Tom · July 2004

Sounds to me like you hired the wrong person for production manager... How can you engage and motivate employees where there is no opportunity to reward employees for their performance or outstanding accomplishments. I was in a manufacturing setting for 9 years and never would have considered adopting a pay structure like what he has proposed. Sounds like he is trying to take the easy way out and not have to deal with employee issues surrounding pay. Make sure he hasnt called the local union hall and asked them to stop by for a visit as well. You need to do a root cause analysis and determine what the real problem is and not let this clown dictate a change to a non-problem.

Just my opinion.

Parabeagle · July 2004

The closest example I can think of to a scheme such as that proposed by your production manager exists in the military. Two lieutenants with three years experience, for example, receive the same base pay even though one is a highly trained pilot and the other is a supply officer. But even the military recognizes that there need to be incentives so they adopted bonuses, proficiency pay, special pay for special circumstances, etc. Otherwise, there would be no incentive to take on the tough jobs.

I think your production manager's scheme is a bad idea.

Pork · July 2004

parabeagle: Don't forget that speciality skills receive incentive pay for using their special skills, like "pilot" which always collected an additional amount of cash monthly for being a "pilot on flight status" or the paratrooper on "jump status" earned additional pay. Pay, that when faced as a young lt having a "cook out" with thou neighbor on flight status, meant they could eat steak in stead of chicken or hot dogs.

I agree with you the system sucked, but it worked and those of us who became non-competitive were let out of the service through RIFs or end of contracted service with no interest to extend the term of service.

If the company would set the base and then have a strong and obtainable "performance bonus" structure to reward the excelling individuals for their achievements on an immediate basis, it can also work.

After leaving the service and getting into private sector for the last 20 years, I have not seen the military system of compensation established anywhere except in the government service. The new guy must be a recent military exit person!

The military system does eliminate the concerns for who makes what money, everyone knows. It causes one to understand that "working for money is a short span motivator, because it will never be enough to satisfy the individuals preceived worth. What it did, however, is bring one to the realization that if one likes that life style, one must always be competiting with one's peer group for outstanding achievement, if you are going to be allowed to continue to live and move up in rank and responsibility, one must "perform at the highest level available to you as an individual and as a group of peers. Fail either and you will be gone. I DO NOT SEE PRODUCTION IN ANY BUSINESS ABLE TO SUSTAIN THAT PROCESS!!!

My thoughts!!!

PORK

mwild31 · July 2004

Well, I guess it could be done that way, but to quote a General from WWII I think my response would be, "Nuts!" x:D

You're from WA, I'm not sure where, but in most places here, it's feast or "warm body syndrome" when it comes to hiring. When it's a feast, starting everyone at the same wage is easier, but when it's "warm body syndrome" you might have to increase the starting wage to attract eligible new hires. The other issue is what if someone new has experience in the field working for a competitor - can't you give them more money to start or attract them over to your company? If everyone receives the same increase, where's the incentive to work harder or better than others? Where's the incentive to increase job knowledge/skill? No merit increases - how do you then keep leadership talent on board when they have learned the ropes? What if your company can't afford to give increases or the market dictates that you don't have to give increases because so many folks in the region have been laid off, you've spelled out a three year plan, are you then setting yourself up to be obligated by it? With the plan your PM is suggesting, the onus is on the employer to provide more money, not based on profitability, market conditions, leadership potential, expertise in the job, but based simply on the ee's seniority with the company (which it sounds like you want to avoid, but in effect have set up again). Also, any time you break these new wage 'rules', you better be able to explain why & not show a bias.

My suggestion would be a skills matrix that's tied to wages. EE's that know x, y and z are compensated at this level, and ee's that only know y are compensated at a different level. This way, the incentive for the ee's is to learn more & increase their knowledge & if the info is posted, then there's no excuse. I wouldn't eliminate, in this model, merit increases or the ability to offer competitive wages when the market dictates. Also, I would communicate that profitability/market dictates wage increases (when earned) & not time on the job. Sorry, but the PM seems a little 'yeller' to me and is getting into debates with ee's on wages & letting it rule his head a bit. Reign him back in! Good luck! x:-)

Don D · July 2004

[font size="1" color="#FF0000"]LAST EDITED ON 07-08-04 AT 07:40AM (CST)[/font][br][br]I worked for the government for quite a few years where this was the prevailing theory. It was and is a dismal failure and the antithesis of incentive. Give the same increase to all, period. Giving people equal pay and equal incremental raises without regard to production and performance earns him a dunce hat. This man ought to be fired. Bounce his (butt) out of town and put the word out on him in the community.

deniseE · July 2004

I agree with everyone else...our agency is tied to the state govt and our rank and file ee's are paid this way. One of the largest complaints we see on the annual surveys is that ee's don't feel like working harder offers any benefit...with your current system you can see the ee's that are interested in learning more for better pay. In the "new" situation, who would agree to work the harder jobs???

The disgruntled ee's will remain disgruntled. And you'll likely upset the good ee's that you'd want to retain.

Crout · July 2004

I don't work in manufacturing (although I would like to in order to round out the resume) but it looks to me like your production manager would have you adopt one of the worst aspects of a Union environment. It's a bad idea, and would only serve to frustrate those employees who DO care about the company and the work they do.

Dutch2 · July 2004

I have to say "Amen" to the above. I worked in such a setting while attending college and saw first hand how many were proud of the fact that they only had to do the minimum and they would receive the same pay, benefits, etc. as everyone else... so why do more than you have to do?
I strongly believe in a merit system for pay based on each ee's production, job performance, attitude, etc.
Speaking of merit systems... Is this the time to ask if anyone has the perfect evaluation form that every Supervisor and every ee will support fully?
Good Luck with your Production Manager,
Dutch2

dchr9203 · July 2004

This type of pay practice deflates and demotivates employees. We well know you have doers and you have slackers and when you reward both the same, doers either become slackers or they move on to a company who appreciates their contributions and rewards them accordingly (and goes without saying your slackers remain just that). Bet your production manager wouldn't appreciate the same philosphy toward his increase, bonus and/or incentives.

Whatever · July 2004

We have a union. Their philosophy is that everyone should be paid exactly by the wage in the contract. However, it doesn't work. We have given merit increases. The person who does more than the minimum required, who finds ways to do the job better, who takes pride in the quality of their work should be recognized.

ritaanz · July 2004

Egads! Did you hire your Production Manager from a competitor? It certainly looks like he is trying to doom the facility. If you have ever worked in a union environment, you would know first hand how horrendous a flat scale is.

No motivation. No drive. No enthusiasm. No interest. Need I go on?

MB1004 · July 2004

Thanks for all your opinions!

Let me first say that I agree that the idea would be horrible. Why would anyone do better or work harder when there was no motivation? Our new PM is doing a great job so far (minus this quack idea). He comes from a very large corporation that is union and said used this method very successfully. We are under 100, not union and currently have an incentive based system where if they want more, they have to learn more, perform, etc. I've never worked for a company that had a flat scale, so I wanted to see if anyone else out there ever had and what their opinions were. I'm relieved to see that just about everyone agrees!

Now....how to tell him politely that it's not going to happen.

Parabeagle · July 2004

Print out this thread and tell him that a couple dozen HR people offered sage, sound guidance regarding the issue that seems to run counter to his plan - once we all stopped laughing, that is. x:-)

Crout · July 2004

Try "Dude, it's not gonna happen."

MB1004 · July 2004

I was thinking more along the lines of sending him in for a drug test to see what he was on.

Pork · July 2004

TO ALL FORUM PARTICIPANTS:

This question and our posted treads to the "newcomer" is an absolute example of professional adult HR assistance to our chosen vocation and this new member, who will most likely come again to our door for wisdom and guidance. I enjoyed reading every post and I have gladly regenered the check and the gong for this original post.

May every one have a Blessed day and a good weekend.

"Dandy PORK" it is so good!

KathiHR · July 2004

Bad idea!!! Here's what your future years will look like: your hard workers will take the experience gained with your company & go where they will be rewarded for their hard work. Your losers will stay forever, putting in time & getting that automatic increase every year. Picture your company after a few years of that!

ray a · July 2004

Hey this basic philosophy seems to be working in China and Cuba, isn't it? Flat pay scale, no incentive, capitalism is bad, everything is gray or olive green. But wait a minute, isn't China starting to introduce capitalism in small doses using incentives to helpmake business thrive in the world community? Oh, that's right, it was tried in the old Soviet Union and that failed and Cuba isn't exactly a world economic force. Guess afterall, I have to agree with the other posters, take away the incentives for an ee to do better and you end up with mediocre at best.

Pork · July 2004

Ray: What a unique way of looking at the issue from "global economic position". Pat yourself on the back for such insiteful thinking on a grand scale.

For that you have the freedom to go purchase, MO PORK, tell'um PORK sent you to pick up some "pig ears and tail" and a bucket of fresh chitterlings!

PORK

NM _Tom · July 2004

PORK, I've wondered for some time now, but have been afraid to ask up until now. I figure I've got nothing to loose other than my lunch... but what the hell are the "golden juices" you talk about frequently? Do I really want to know?

Parabeagle · July 2004

NM Tom - I've wondered the same thing but have been afraid to ask. I wonder if it's anything like the ingredient listed on my favorite Original Taco House red sauce: "selected pork liquids."

When I saw that, I stopped eating the sauce.

POPEYE · July 2004

I'll let Pork explain but I certainly hope it is not one and the same "Golden Juices"!!!!!

Pork · July 2004

NM_TOM: We are a Swine Farming Corporation with 33000 sows in production. We also have 300 boars that produce the "Semen with tiny darting Sperm", which we use to Artificially Inseminate the mothers which produce our 11,000 baby pigs weekly. It is these "Golden Juices" collected from Boars with $30,000 dollar values; daily, these packages must be delivered "just in time" to the farm sites for the breeders to impregnate the eggs that just dropped last night and this morning. We collect from 4AM until 8AM, package, charge out, and deliver daily these "Golden Juices", which is the piece of the machinery that molds Gods function for this animal to reproduce. Miss an opportunity and the window closes very quickly.

Tom never fear to ask, I have never enjoyed HR over the last 30 years more than now. It is quite a learning experience and regardless of the animals and the machinery required to function it is still the HUMAN THAT MAKES IT ALL HAPPEN. OUR PEOPLE ISSUES ARE NO DIFFERENT THAN THE BANKING HR'S EMPLOYEE ISSUES.

"DANDY PORK"

Parabeagle · July 2004

That clears that up, Pork. Any ideas about what the ingredient "selected pork liquids" in that taco sauce I bought might be?

Pork · July 2004

Parabeagle: Probably "Pork Fat" as a binding or taste flavor from the "bacon" portion which would still be rendered liquid. Remember that the "HOG" has no waste in the processing activity, everything is captured and used for some purpose as a food source. Our "HOGs" are taken to market at 250 to 260 pounds, which is the exact point in the growth process that the animal begins to convert food for growth to food for "FAT". After the 260 lbs the animal slows in putting on meat and the meat begins to become marbled with "FAT" tissue. If your "pork chop" has the white streeks through the meat, it most likely came from a processed hog that weighed greater than 260 lbs and is more aged than our "prime cut hogs".

The above has nothing to do with the topic of this thread, but I really enjoy telling others in my world about this most interesting vocation as an HR in the Swine world of business.

Ya'll have a beautiful day and a Blessed one at that!

"Dandy Pork"

Don D · July 2004

Tis a strange man indeed who will not eat a mushroom but will eat something called 'selected pork liquids'. Obviously it is labeled that way so they will not have to identify it otherwise. A true analysis would also have you questioning what it is they actually REJECT if they in fact SELECT some liquids.

I'll venture a guess that you also eat 'mechanically separated chicken parts'. The Forum Police roundly chastised me last month for my stray remarks about 'thu juices', so I will leave it to the Oregonian's to continue the inquiry. But, do look for that on the label before you check out!

Bill ONeill · July 2004

I could go on & on over this topic, as I have been involved in a number of manufacturing pay systems (paid for each piece / standard hours system / cell performance). In short, my opinion is that any manufacturing pay system needs to be performance based. It is disengenuous to have two operators working side by side, making the same pay with high production from one and low production from the other.

Don D · July 2004

MB1004: I've read all the responses and do not see a single one supporting that of your new production manager. What does that tell us/you? Where do you think he came up with this assinine theory, or are you able to confront the issue?

Looking for opinions...

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