Workplaces That Work
Benefits of Enhanced Performance
Better people management is associated with increases in sales and market value
Management approaches that some authors label High Performance Work Practices20 have been shown to reduce turnover, improve employee satisfaction, increase sales per employee and yield higher profits and market value.
One study that compared 855 firms showed that a meaningful increase in the use of these work practices was related to an increase of $40,000 in annual sales per employee and an increase in the firm’s market value of over $27,000 per employee. For two employers with 500 employees, this would mean that the firm with better human resource management practices (fairness and merit, involvement, training, etc.) would be expected to out-perform the other by $20M in annual sales and by $13M in market value.
Improved retention leads to better return on investments in training and incentives
Canadian organizations devote 41.5 per cent of their training investments on employees in technical and service/production jobs (approximately $200,000 out of the $530,000 spent by a typical employer whose overall workforce is 1000 or more people).21 Consider an employer where women hold 50 skilled trade jobs and turnover among them is high at 30 per cent annually. For this employer, approximately $8,000 of annual training investment, or $530 for each of the 15 women who leave, brings little return to the organization. The answer is not to restrict training but to enhance retention.
Research by The Conference Board of Canada shows that organizations continue to make investments in performance bonuses or variable pay, presumably to reward past performance and more importantly to encourage future good performance. For example, 63 per cent of private sector employers provide some type of annual variable pay plan to non-unionized technical and skilled trades employees, with an average target payout of 6.6 per cent of salary.22 A high turnover rate among these employees will mean that a considerable compensation investment each year, will bring less than optimal return to the organization.
Add to these figures the costs of indirect investments, such as communication and coaching and it is clear that investment in people’s performance must be paired with an investment in improving the ability to retain them.
Tip
Support the advancement of talented women within the organization by identifying and tracking those with potential, providing access to new challenges and good developmental assignments, ensuring candid constructive feedback on their performance and on-going support in their success.
Success Story
In May of 2000, after 92 years in operation on the Halifax waterfront, Local 269 of the Internal Longshoremen’s Association (I.L.A.) made history by accepting Rosanne Weagle as its first female member. Since then, the Halifax Employers Association and Local 269 have successfully attracted and retained a significant number of women workers.
This success is the result of hard work, careful preparation and a long-term perspective. For two years prior to introducing women into the longshore industry, consultants, employers and union representatives worked together to ensure that the environment would encourage their success.
Workplace practices were reviewed and updated, cultural barriers were identified and addressed and training programs were established. By all reports, the initiative has been a success and well worth the investment. Success was achieved by pairing supply side initiatives that encouraged women to consider and train for longshore occupations, with demand side initiatives that created workplace climates that attracted and retained skilled women.
When and where to start?
The time to start is now. Small immediate changes can signal meaningful change to employees. Employers can start to identify opportunities for change by reviewing their practices and current results.
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