I am new in HR management.We have only 16 people in production. But they do different work. I need your advice on how to give increment to production people.
From India, Kolkata
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From India, Kolkata
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Dear Sugandha,
Whether the employees work in the same department or in a different department, what matters is whether their performance is measured scientifically or not. This is far more challenging. The second challenge is whether you measure what deserves to be measured. A few important costs for the production department are:
a) Production cost
b) Work In Process cost
c) Inspection cost
d) Quality cost
Salary increments should be linked to the management of these costs. For a salary increment, you can set various performance slabs. Based on the score of the individual, he/she should receive the increment.
Nevertheless, as stated above, measuring the above costs scientifically is not that easy. Mere checking whether the production target is met or not, the percentage of non-compliance, etc., are superfluous measures. If the increments are not based on the above costs, then possibly the employees in the production department may get a salary increment, but your organization could lose. This is a pernicious trend.
I have written the above post based on the understanding of general production. However, your production department might have additional costs as well. Therefore, unless the end-to-end production process is studied, no further comments can be given.
Thanks,
Dinesh Divekar
From India, Bangalore
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8037Whether the employees work in the same department or in a different department, what matters is whether their performance is measured scientifically or not. This is far more challenging. The second challenge is whether you measure what deserves to be measured. A few important costs for the production department are:
a) Production cost
b) Work In Process cost
c) Inspection cost
d) Quality cost
Salary increments should be linked to the management of these costs. For a salary increment, you can set various performance slabs. Based on the score of the individual, he/she should receive the increment.
Nevertheless, as stated above, measuring the above costs scientifically is not that easy. Mere checking whether the production target is met or not, the percentage of non-compliance, etc., are superfluous measures. If the increments are not based on the above costs, then possibly the employees in the production department may get a salary increment, but your organization could lose. This is a pernicious trend.
I have written the above post based on the understanding of general production. However, your production department might have additional costs as well. Therefore, unless the end-to-end production process is studied, no further comments can be given.
Thanks,
Dinesh Divekar
From India, Bangalore
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Thanks You Dinesh. We measure the following KPI for production people- a) Number of product b) Time of production c) Defects Can you suggest any formula based on this.
From India, Kolkata
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From India, Kolkata
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Dear Sugandha,
I have mentioned the various costs in my previous post. Please include these costs as well. Secondly, what about maintenance? Is it a separate department or part of the production department?
For the Maintenance Department, the most important Key Performance Indicator (KPI) is OEE. The second most important KPI is "Maintenance Cost against Total Sales."
In addition to production, you need to devise cost-based KPIs for all departments. I provide consulting services to establish a comprehensive Performance Management System. I thoroughly study the systems and processes of each department, identify the direct and indirect costs associated with each department, and assign the respective costs to the Head of Department (HOD). To learn more about my services, you may click here.
Thanks,
Dinesh Divekar
From India, Bangalore
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I have mentioned the various costs in my previous post. Please include these costs as well. Secondly, what about maintenance? Is it a separate department or part of the production department?
For the Maintenance Department, the most important Key Performance Indicator (KPI) is OEE. The second most important KPI is "Maintenance Cost against Total Sales."
In addition to production, you need to devise cost-based KPIs for all departments. I provide consulting services to establish a comprehensive Performance Management System. I thoroughly study the systems and processes of each department, identify the direct and indirect costs associated with each department, and assign the respective costs to the Head of Department (HOD). To learn more about my services, you may click here.
Thanks,
Dinesh Divekar
From India, Bangalore
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