Performance Measurement – Employee Retention

The link below shows two Performance Scorecards, one for a manufacturing business and one for an accounting firm. Performance Scorecards Download

Accounting Firm
The accounting firm Client was working with us on improving their Audit process. This project successfully reduced the time to produce audit reports for their clients from 45 to 22 days.  As you can see, we also created a performance scorecard for the audit department. Despite people thinking that accountants track lots of numbers, they reduced their performance focus to just 5 measures. During the project we reviewed the Scorecard with the

Performance Measurement and Performance Scorecards as a critically important part of any business improvement project.

Managing Partner of the firm, John Herber. We had retention as the fourth out of five most important performance measures.  John asked us to move it to the top. As you look at these measures it amazed and inspired me that the top person in the firm would put retention above Customer service (days to delivery and # of BPA reports), revenue growth and productivity.  As amazed were his team, who all took note of the importance to him of employee retention.

Manufacturing Company
While I am amazed that a professional services firm (above) would prioritize retaining their accountants / consultants, our manufacturing Client, putting retention of their hourly workforce is just as incredible.  This company realized that retaining employees is the key to all of their other performance measures (productivity, fill rate and housekeeping).  Therefore their action items were focused on how to retain employees.  This company has a first hour plan, first day plan, first week plan and first month plan.  The new employees first moments in the factory are planned including making sure they have uniforms, their first workday’s requirements are clear and whom will be their trainer.  The plant manager takes this employee to lunch on their first day at the company café.  At the end of the first day the plant manager interviews the new employee to provide and get feedback about the first day.  The same is true at the end of the week.  Finally after the first month, if there are any new employees starting the “1 month veteran” is given training responsibility for the new employee.  If you want someone to buy in to the company mission, make them responsible for teaching new employees.

Measuring Retention
Retention can actually be a confusing measure.  Our measure divides the total number of people who have left or were terminated and divides this by the average number of employees over the last 12 months.  If you have on average 100 people and 50 have left or were terminated in the last 12 months your retention is 50%.

If you want to talk to us about performance measurement email mitch@supplyvelocity.com.