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Labor management technology can evaluate your compensation model

by Stephen Hawley Martin
for Virginia Business
June 5, 2007

Labor management technology (LMT) can become the centerpiece of managing workers. An up-to-date system will be the repository of information about what goes on every day in a business, tying this to the people that make it happen.

The system deposits this information into its memory banks, creating a history of the business and individual workers over time, allowing management to analyze what worked and what didn't. If the data reveals problematic problems, the technology can be used to provide solutions.

If, for example, employee turnover is highest among people who work long shifts, the system can limit the scheduling of excessive-duty periods. If working weekends and holidays is a deterrent, then rotating these assignments among employees and tracking who worked the last weekend or holiday to make sure they don't get called up for a second time in a row may be useful.

LMT provides a natural platform for integrating all sorts of business intelligence. The more information that's gathered, the more meaningful the data will become. Scheduling software can provide the background logic, a human resources database can supply employee demographics and job information, and an ERP (enterprise resource planning) system can provide tracking labels and scheduling volumes.

Labor analytic tools can pull LMT data and analyze outputs. Training - or education management systems - can be integrated with job data, employee skill sets, schedules and payroll. Access control systems can use LMT data to control entry into the facility and track the flow of people on site. Billing systems use LMT data to eliminate redundancy and ensure consistency between paid and billable hours.

What makes LMT so efficient is that data only needs to be entered once, and then can be shared among systems. This makes each one more intelligent. Plus, instant access is created because the information is distributed immediately. This means managers can evaluate what's happening in real time.

All kinds of things can now be tracked. If there's an incentive program to get people to work weekends, shouldn't management want to know how effective it is? What about programs like student loan repayment plans, help with home loans, help with buying a personal computer, discounts at certain stores and other incentives? How effective are these programs? Do they lead to employee retention? Now it's possible to know.

Another thing to track are total compensation packages vis-a-vis the competition. Think of all the ways employees might be compensated. Overtime, incentives to work on holidays, weekend incentives, travel pay, new hire bonuses, overnight pay and sleep pay are just a few examples. In health care, a nurse whose base salary is $50,000 per year can sometimes boost her compensation to $80,000 if she's figured out the system. Suppose, for example, she gets overtime after 40 hours plus a incentive to work weekends? If she's reached 40 hours by Friday, why wouldn't she sign up for the weekend, too?

Wouldn't it make sense to track all these programs and see if they really accomplish what they were set up to accomplish?

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Stephen Hawley Martin is a former principal of The Martin Agency in Richmond and the author of more than half a dozen books including his newest, Lean Enterprise Leader: How to Get Things Done Without Doing It All Yourself. He is editor and publisher of The Oaklea Press, a book publishing business dedicated primarily to helping business executives increase productivity.