Wednesday, March 24, 2010

Theory of Constraints POOGI Part 68 -- Employees Need Time Off? That’s unproductive! (conclusion)

We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn}

Dr. Lisa: So business owners cope with the issue in several ways. Many let the problem happen to them. They have long-standing vacation policies that dictate how much time off people get, most often dictated by length of service. Many times, the employees get to choose when they would like off, with no limit as to how many people can be off at a time. But, some business owners do manage this, placing a limit on how many people can be off at the same time, and from the same department.

Brad: In my experience, once employees make enough money, time off becomes a high priority. And, that is in conflict with the needs of the business and business owner. I want a secure, satisfied work force to keep turnover down, but the more secure and satisfied they are, the more time off they desire.

Dr. Lisa: Interesting dilemma to have with your best and longest term employees. And, I would guess that you also have employees who constantly need last minute time off to deal with the crisis of the moment.
Brad: Yes, of course.
Dr Lisa: Unplanned time off can be very disruptive. Sometimes, it is the same people who need or take unplanned time off over and over again. That requires enough people in total to cover for the lost productivity. It may be additional "protective capacity" in the department, or in other departments that pitch in to help. Sometimes, the work just sits and waits for the employee to return, especially when no one else has that skill set. That interrupts flow, and flow is the most important thing a business needs to maintain.
Brad: Again, these problems hit small businesses especially hard. There is no one else with the needed skill set and/or there aren't enough people to get the job done in the first place.

Dr. Lisa: How did you handle it as an owner of a label printing business?
Brad: By installing a system that wasn't popular, but was very effective. For all non-exempt employees, I raised pay rates and the vacation that was possible to earn. That was the good news, and provided me the opportunity to put in a system that had some teeth to it. Everyone earned vacation by working a full work week. Any unplanned absences during regular hours (being late, sick, etc.) resulting in earning less vacation, and required using existing vacation time for the time off. No longer was vacation an entitlement that was just given, and we actually had a system for "earning" it. We coordinated employees' vacation such that two weeks of vacation were taken by employees in blocks, one week in December and another in July. Otherwise, two weeks notice was required, and we quoted two weeks lead-time, so we could predict available resources accurately.
Dr. Lisa: Would you recommend something like that for other business owners.
Brad: Only if they have a problem with availability of people.
Dr Lisa: Nice answer and as you know, I agree. We should only do those things that are necessary and sufficient to achieve the results we're after. So my recommendation is to do the Velocity Scheduling System Coaching Program first (or Project Velocity System for service companies). Then, if you have this issue, it will show up in the red zone of the buffer and you now know what to do about it.

Here's to maximizing YOUR profits!

Dr Lisa

(c)Copyright 2010, Dr Lisa, Inc. All rights reserved.

Hello? Is anyone reading? Please add your comments (just click the comments hyper link at the bottom of the post)


MMA Zone said...

Hello Dr. Lisa,
I saw your note to come write a comment in your blog post (I get it in email format). So, I thought I would come by and say that I love reading your emails. I have been listening and learning from you in Stomper.

Patric said...

I like this idea and the advice to resist implementing it unless there is a known need. There is bound to be a negative affect on moral with this type of move (as necessary as it might be).
We have a problem with bathroom breaks (I know this sounds like 3rd grade but it is true!). I was wondering what policies you have seen that manage this item?
We were thinking about having employees clock out for bathroom breaks but the administration is high.
Any experience with this negative affect on resources?

Dr Lisa Lang said...

Thanks for stopping by Tony! BTW what Theory of Constraints topic would you like to learn more about?

Dr Lisa

Dr Lisa Lang said...

Hi Patric,

Bathroom break touble is not surprising.

Policies, procedures and measure are what we use as managers to drive behavior. The policy that Brad reviewed did garner some whining. But it also delivered the desired effect.

If you're the Patric that has signed up for our Velocity Scheduling System Coaching Program ( let's see what issues remain after you have the system in place.

Dr Lisa

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