Performance Related Pay

We have recently helped a customer to put in place a performance related pay scheme for their warehouse employees – the intention of the scheme is to increase employee engagement.

A strategy has been adopted and endorsed by the senior executives that sets out the tangible benefits expected from the scheme –

  • Recognising individual consistent performers
  • Reward performers
  • Enhancing attraction and reduce churn
  • Reducing the over cost to serve – reward schemes self fund

Recognise individual consistent performers

Know the contribution being made by each employee with a level of precision provided by Vitesse, which was hitherto unseen. The traditional metric of Units Per Hour as an indicator of output is common but unfair as a measure of performance.

Reward performers  

Fairly straight forward, pay people more to reflect their output and contribution.

It is absolutely critical output is calibrated with quality measures to ensure volumes are not being produced which are error laden – an error tolerance can be applied that regulates the reward performance.

Retention and Churn

Joining a workforce where you can have confidence in the way you are being evaluated is refreshing. People working in a place where unintended bias is mitigated and feedback is provided with empricial data are likely to feel engaged and valued – an increasing length of service, retaining knowledgeable people who are rewarded for their efforts makes good business sense.

Reduce the Cost to Serve

Bonus schemes should self fund – creating a leaner environment in a warehouse operation has a dramatic and direct effect on the trading of a business. Cashflows improve with lower agency spend and margins increase where fewer hours are being used to handle increased volumes.

Despite all the positives, bonus schemes for warehouse employees remain uncommon but needn’t be.

Vitesse can measure quality and quantity.

 

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Daniel Dodd

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