Beyond Personal Productivity

By Jesse W. Brogan, President

The Management Upgrade Shop

From The Principles of Scientific Management, 1911 by Frederick Taylor:

Broadly speaking, then, the best type of management in ordinary use may be defined as management in which the workmen give their best initiative and in return receive some special incentive from their employers. This type of management will be referred to as the management of "initiative and incentive."

Taylor’s book is no minor work; it is the publication that eventually launched the profession of industrial engineering and began the modern study of performance management. It still has much to say to modern managers.

Current management improvement efforts are often intent on establishing efficiency through maximizing personal productivity. Personal productivity is the same concept we see in Taylor’s work, where it is referred to as “initiative and incentive.” It is based on getting the greatest possible personal performance from each employee.

Management by initiative and incentive was founded on a belief that the purpose of management was getting other people to do the work. Rewards and punishments were applied to achieve that end; and were implemented by various methods designed to maximize the output from each person’s efforts.

To put this into perspective, Taylor addresses the work manager at the beginning of the 20^th century as a boss, someone who performed management as an agent of the owner. The boss represented the owner for the purpose of assigning work and receiving product; but essentially had little responsibility for work performance. His responsibility was to assure that there were sufficient workmen assigned to do the work, and to keep them at their efforts until the work was completed.

What Taylor recognized was that the challenge to performance was more than just the productivity of the workmen. It also went to ineffectiveness of their efforts in generating product. This provided a direction for remarkable improvement; and that change in direction started with a different approach to management.

The change was deep; it involved making the boss manager into a performance manager. It redefined management so the manager took personal responsibility for assuring the performance of subordinate workers. In a few decades, the 19^th century work-boss was replaced by a 20^th century foreman, a specialty that is still with us today.

This rapidity of change was driven by economics. Effective output from the average worker was not just increased; it was more than doubled. Applying Taylor’s methods of Scientific Management yielded economic advantage so great that even man’s natural resistance to change could not hold it back.

The direction of that change is also startling. Where workmen had previously provided their own tools as a condition of employment, management started providing the right tools to promote efficient performance. Where workmen had been responsible for performance methods, management studied performance processes, determined the most efficient methods, and then trained the workers to use those efficient methods. Where workmen had performed in work gangs, management assumed charge of organizing and coordinating group efforts into consistent and effective group-performance processes. Management assumed responsibility for providing working environments that promoted efficient performances.

The bulk of the change went to management rather to workers. While Taylor also addressed more-effective incentive systems, the greater benefit was not found through applying incentives and rewarding initiative. It was accomplished through management assuming responsibility to proactively support worker performances.

Of even greater significance for performance managers, changes initiated by this shift in management decreased the personal efforts of workmen. Their performance hours were reduced to a level where efficient performance was most sustainable. Their work was simplified and redesigned so that they became less fatigued by their efforts. In short, workers used less initiative and had reduced incentive to work hard. They did less work! Their performances were made more effective through proactive management.

Even as performance was increased,

personal productivity was reduced.

A first lesson for the modern manager is that increases to personal productivity are not well correlated with increases in organizational performance. Our modern productivity-based approach to performance management is suspect – independent of its present popularity.

The same boss-based approach that was in common use for production management in 1900, is now common everywhere except in production. That is why productivity measures are being favored. What we can learn from history is that an effort based on maximizing personal productivity is not an effective way to maximize performance.

The General Solution:

Engineering, as the art and science for finding practical solutions to real problems, tends to use common-sense approaches. One general rule is: Expand on what works; stop doing things that don’t.

The productivity approach in place during the early 1900’s was overtaken in the production environment by scientific management because it didn’t work well for assuring performance at reasonable cost. Taylor’s approach to production management worked; and it was startlingly effective. Engineering application will expand on Taylor’s approach to production management, applying scientific-management principles to performance of work in other areas of the business.

From Taylor’s studies, we know that the primary need for change is in management, not in applying personal performance incentives to the efforts of those who are managed. The direction for the change is also obvious; it is a change from a boss-based to a performance-based management. It is a change away from management “representing” the organization in its dealings with those who do the work. The change is toward management as a proactive and important part of larger group-performance processes.

Performance improvement will be accomplished through actions that hold the working manager personally responsible for the productive results accomplished by managed subordinates.

Solution Application:

Also starting with Taylor’s work, we see that the addition of performance responsibility was not sufficient to cause the larger benefits of performance management. Shifting responsibility only aligned the purpose of management with the purpose of those who were being managed. Benefits came about through specific efforts that the working manager used to support subordinate performances. This was a new skill area that was developed as part of both industrial engineering and production management.

Defining and identifying these effective changes became the technical expertise we recognize as traditional industrial engineering. This included the design and selection of tools, jigs and fixtures. It included arrangement of working equipment and work groups. It included work analysis and development of coordinated production lines and work groups. It included design of facilities to promote performance efficiency.

Management engineering, the application of the principles of industrial engineering to work performed in gaining through a subordinate organization, is the appropriate expertise for implementing performance management in the office environment. It includes the design of organizations and management processes to assure efficiency of operation. It includes the study of internal products and customers to maximize the flow of value. It includes the study of management relations.

Basic Management Engineering Concepts:

The First Rule of Management Engineering:

Management is an essential;

you cannot improve management

by replacing it with something else.

Management, the gaining of performance through the operation of an organized effort, is naturally based on what is delivered from the organization to its customers. This concentration on organizational performance cannot be improved by replacing it with focus on personal productivity. Any focus on personal productivity will redirect/distract management from pursuing organizational purposes.

Performance Metrics apply to the organization as a whole. Organizations have only two value metrics, value produced and cost of producing it. The value produced is measured by product delivered to external customers so that it gains operating resources. Customers determine value by what they are willing to pay to get the product. Cost is the whole cost of operating the organization while it generates and delivers goods or services to its customers.

Increasing the personal productivity of a worker, or even of all workers, promotes efficiency when it increases the value of products that the organization delivers to its customers. It also increases efficiency when it reduces the cost of operating the organization. If it does not accomplish one of these, an effort for increasing the personal productivity is likely to result in inefficiency

There are only two reasons to have any element or process in the organization. The first is that it produces the goods or services that the organization delivers to its customers. The second is that it supports those who generate or deliver those goods and services.

This general observation applies to both structural elements, and to internal processes. If any element is found not to produce, and not to contribute to productive performance in other areas of the organization, it can be eliminated (decreasing operating cost) without loss to performance.

Management does not generate products for organizational customers; it has value only as it supports performances by those who are managed. With current focus on non-productive efforts, such as working to achieve a paperless office, changes can be initiated without any clear expectation for creating new value or for reducing operating cost.

Intensive management is only effective when applied to critical processes. Improving the productivity of a single person or performance area has effect only if that increase will cause increase to organizational performance.

Applications of industrial engineering have affects on management. From our applications in production, we see that the purpose for having a manager is to add value to the performance processes of those who are managed.

Wherever a management effort neither produces something of value to organizational customers, nor supports the productive efforts of others, efficiency can be improved by abandoning that effort.

Remarkable Changes in Attitude and Approach:

Taylor stated a fundamental for his work:

THE principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee.

What Taylor accomplished was not “getting more from your workers” as they continued to do what they were doing before. Remarkable efficiency improvement was accomplished through reducing what had to be done to gain the desired productive result.

Rather than trying to reinvent the wheel, we need to learn from our history of performance management. Increasing what people do is a very limited approach to efficiency work. The benefits of industrial engineering accrue to all parties; there is reduction in work performance combined with increase in result.

Taylor’s application pointed out that both employees and employers could be benefited. Employees could be trained to be worth more to their employer, even as management learned to increase performance by protecting them from exhaustion and distraction. After the application of basic industrial engineering, the workers increased what the business had to sell to its customers, were paid more for generating that increase, and went home less tired at the end of the day.

A more effective management also aligns the efforts of managers and workers. Observing how the supportive attitude in management brought workers and managers together in their efforts based on a single purpose, Taylor also wrote:

The writer has gone thus fully into Mr. Gilbreth’s method in order that it may be perfectly clear that this increase in output and that this harmony could not have been attained under the management of “initiative and incentive” (that is by putting the problem up to the workman and leaving him to solve it alone) which has been the philosophy of the past.

The Downside of Efficiency Engineering

Organizational Efficiency = Value produced / Cost of producing it

As was made very clear in Taylor’s work, when efficiency engineering techniques were first applied to a production effort, the results included a marked reduction in the number of workers required to meet performance requirements. Even with paying those remaining workers substantially more than they had been earning (for which they worked less), there were still great benefits for the organization.

As organizational output is often limited by what the organization can sell to its customers, the more-efficient production manager had to terminate some of those who had been working with him or her, who were likely to include personal friends.

The same effect can be expected when the principles of industrial engineering are applied to management and internal support efforts in the office environment. The number of management and internal support employees should be sharply reduced. While their efforts are reduced, their contribution to performance will increase, entitling them to higher pay and benefits. In order to secure the benefits, the senior manager will have to terminate people he personally knows and has worked with in the past.

As the production manager lost production workers when he increased productive efficiency, so the senior manager will lose management employees and internal support employees when he increases office-area efficiency.

The acceptance of this “cost of change” is part of the investment decision that management must make if it is to reap the benefits of remarkably improved performance management.

Additional Information:

Taylor’s The Principles of Scientific Management is long out of copyright. Your personal copy can be downloaded into Adobe Reader through the internet link below, and then saved to your local computer.

http://jessebrogan.home.att.net/books/ScientificMgmt.pdf