Skipping Seniority and Rewarding High Performers - Darwinian or Genius?

Let's say you have a large group of employees in the same job/position (we'll say more than 10 for the sake of argument, but in manufacturing and call center environments, it could be hundreds).  How do you handle scheduling?  The time-tested way in most environments is to use seniority - the longer you've been at the company, the earlier you get to pick your shift relative to your peers.

That usually meant that the newbies had to work nights and weekends, while the more experienced got nights and weekends off.  Pay your dues, talented newbie, and perhaps you'll hang on long enough to get the hours a "normal" person works.  Seems like that usually happens at the 6-12 month mark based on turnover in most environments.

I've been in environments with hundreds of employees in the same position, and we always talked about changing up the scheduled procedure to focus on performance rather than seniority.  The main reason we didn't tweak it was employee relations.  At the end of the day, we didn't want to risk alienating more tenured workers with average performance, which heightens the risk of unions organizing in many shops that fit this scenario.

Of course, there's always someone who's ready to mix it up, which is healthy.  That someone, in this case, is the Ann Taylor retail clothing store, and Knowledge at Wharton gives us the rundown:

"Ann Taylor Stores -- a New York-based retailer of upscale women's clothing -- is using a new computer scheduling system that assigns the busiest and most desirable hours to employees with the strongest sales numbers. Those with less success on the selling floor get far fewer and less desirable hours when new schedules are posted.

While Wal-Mart Stores, Payless ShoeSource and other major retailers have moved to computer-driven scheduling systems that put more workers on the floor at the busiest times, Ann Taylor has added the dimension of individual sales productivity to the equation. Employees who were interviewed by The Journal say the system has resulted in sharp cutbacks in hours for some employees and has diminished morale. One worker who typically was assigned a regular 34-hour-a-week schedule before the system was installed had been cut back to just eight hours in some weeks. "Computers aren't very forgiving when it comes to an individual's life," one former Ann Taylor employee told the paper."

Hat tip to Ann Bares, who checked in on the topic over at Compensation Force, gives her thoughts:

"Ultimately, perhaps, this system has the desired effect of shaking out the less talented workers and leaving behind those with the most sales competency.  While this churn is happening, however (and I would imagine that it happens on an ongoing basis as the workforce turns over), you have the likelihood of serious morale issues as employees who are struggling to achieve sales targets see their schedules shift and their hours drop, presumably until either their expenses or their frustration levels drive them to quit.  Where does coaching and training come into play here?  Or does it?  As the article points out, information technology is no substitute for sound management."

Of course, most (if not all of us) will agree with Ann, when she says that a scheduling system that focuses on performance over tenure is no substitute for coaching and solid performance management (before the annual review). 

The bigger play for me?  Time is running out for companies to take a chance with systems like this.  The potential passing of even a watered-down version of the Employee Free Choice Act (EFCA) is going to make the change, the management related to a switch like this, impossible.

Why?  There's employee relations risk any time you switch from a seniority scheduling module to something more progressive. 

And that means you don't take risks that alienate average performers.  Kind of stinks for the high performers, doesn't it? 

Comments

[John Kill]

What happens if the system has the desired effect of "shaking out the less talented workers" and you are left with only the above average performers? Who works the lousy shifts then?

[Kris Dunn]

John - that's a good question, and my guess is they would have an "open position" issue rather than an all "A Player" issue, right?

KD

[Paul Hebert]

Normally I'm a Darwinian guy but on this I'm having some hesitation.

First, it becomes self-fulfilling - those that have a bad couple of days end up with less busy shifts which means they have less opportunity to increase sales which means they get bad shifts which means they have less sales which means.... awww, you get it.

Second, (in this example)retail isn't a "sales only" gig - it's a customer service gig and that means listening, helping, directing, etc. not just the number. The customer you help today but doesn't buy - may be back tomorrow with friends and family and a fat wallet because you DIDN'T sell them the previous day.

I'm just not sure that any business is best served by managing to a single metric - whether that be sales or customer satisfaction. This smells like another example where management would rather let a machine dictate decisions so that they don't have to or can't make them themselves.

[Dan]

Dang... I'm a math geek with the know-how to design systems like this, and even *I* think it stinks. Depending on the implementation, it definitely is a self-fulfilling prophecy, *especially* if the system is reducing hours for the non-performer. So you reduce the non-performer to 8 hours a week, and he gets frustrated and quits. Now you have to fill his position, but who will take a job (even in this economy) for only 8 hours each week? And even if you find someone, if he's working at a time when he can do the "least harm" (and therefore the least gain as well) to the company, how is he supposed to increase his sales, his hours, and get better shifts? This one smells like a stinker.

Of course this system will diminish morale... it fosters a dog-eat-dog world out there, and who really wants to participate in that? I'm not comfortable at jobs where I know everybody else is trying to get a bite out of my backside. (And yeah... retail is as much about customer service as it is sales, at least from this customer's perspective. And the customer is always number one, is he not?)

[Benefits manager]

This is pretty old news. I read about it in the Wall Street Journal last winter. Perhaps they have passed the shakeout period by now.