By Brad Kamph, Interliance Consulting
Many companies are cutting back. Layoffs, expense trimming and pulling the plug on critical programs are just a few manifestations. While economies might well be a necessity, there is a right way to go about it and a wrong way.
Simply engaging in indiscriminate downsizing could mean leaving yourself with vital functions unmanned and in big trouble. Your most efficient workers could be walking out the door while the inefficient remain. Similarly, a snap decision to let go any workers who are at or close to retirement age could prove disastrous in terms of productivity and unplanned downtime.
The Electric Power Research Institute (EPRI) estimates that 22 percent of lost generation is due to employee error. That is probably a conservative figure. Reducing such errors by 50 percent at one plant increased margins by $245 per installed megawatt. Smart decisions, therefore, have to be made concerning personnel in today’s climate. And the only way to be sure you make the right ones is via an in-depth workforce analysis.
This article looks at the operational side of the equation. Data come from an actual example of a workforce analysis conducted at a U.S. plant. In this case, analysts drilled into every position and function to determine where the efficiencies and inefficiencies lay and what could be done about them.
Focusing on equipment and craft-level positions probably produces the highest immediate returns. That’s because these are the positions that either ensure high levels of uptime or make the errors that lead to expensive downtime. One of the first steps in any serious analysis of the workforce is an assessment of the workers. Fortunately, this can be done rapidly using a good database and a series of online tools.
According to the Inteliance methodology, this is best done by separating the facility into its respective work areas, such as operations, mechanical, electrical and so on, and then into broad duty areas such as pumps, valves and motors. This is further broken down into the specific tasks, the individual elements involved and the knowledge/skills required for each action. For example, take it down to the point where you ask about removing suction and discharging piping, or inspecting motor shims and so on. Each element requires certain knowledge and skills. In this case, locating the suction and discharge flanges and identifying damaged or rusty shims.
What do you do with all this detail? We developed a method whereby employees are asked to perform a self assessment of their capability on each identified item. This is a departure from the normal “training needs analysis” as workers are not asked to rate where they need training, but rather are asked about their capability to perform the work. This analysis is crucial as it provides the “voice of the employee” an often-skipped step in any workforce program and a mistake that can be fatal. In conjunction with the “voice of the employee” a similar rating is completed, against the same foundation, where the business evaluates the criticality of the work required so that the answers can be correlated to derive true business needs of the workforce, in complete alignment with the business needs.
For example, let’s say you are dealing with a specific task. You ask the employee to grade his capability on the task, how difficult he feels the task is to perform, how frequently he encounters problems, how often he performs the task, if there is a standard method for performing it and how important the task is to the business.
This typically uncovers the fact that high certainty exists on less than 50 percent of tasks. Armed with only that data, any plant can begin to see the reasons for lower productivity and unacceptable levels of downtime. However, this really is only the background to a much wider picture.
Certainty data, for instance, is correlated by us against equipment error rates. When this step was taken at the plant mentioned earlier, ash handling systems personnel came up as being the most problematic, with control system personnel showing the least errors.
What does this tell you? For a start, it provides a side check against the data gathered in the initial assessment. Ideally, high certainty rates should occur in areas and tasks with low error rates. If so, you have a list of most of your best personnel. Of course, there are some who will be modest or overly conservative about their on-the-job performance. Error rates, though, will tell the tale.
Another thing to watch for is high certainty in tandem with poor performance. This indicates potential process-related problems. It also is an indicator of where training would be ineffective due to the resistance of the workforce who feel they know the job. It must be approached from a perspective of process improvement or clarification prior to any other remedy.
One point to pay close attention to is attrition expectations due to retirement, with a specific emphasis on critical skill loss. As with any older workforce, the loss of one person may be more extreme if that person has the sole capability of performing specific functions. It also allows a focus on where to target retention programs, where to accelerate workforce development, as well as where to capture knowledge.
At the U.S. plant being analyzed, utility operations and maintenance personnel reported less than 50 percent full certainty for all skills within their job positions. Interestingly, the lowest levels of certainty were found in operational disciplines. By contrast, mechanical electrical and control disciplines scored higher. Drilling down deeper, you can investigate the performance of each shift. Certainty levels often vary significantly from one shift to another.
In addition, the above metrics have to be anchored by an estimate of the value of these functions to the organization as a whole. An area pervaded with poor certainty, high error rates and high attrition expectancy may seem at first glance to be a priority for attention. Yet if this area is at the staff cafeteria or in an auxiliary warehouse, attention isn’t going to feature among organization priorities.
Thus, a criticality evaluation should always be carried out to determine the frequency of specific tasks, the safety factors involved, the degree of difficulty, time it takes to perform, regulatory impact and other critical business factors. It establishes the relative importance of each task to business and operational needs using objective criteria. Only when armed with the picture as laid out above in the initial stages of a workforce analysis is it possible to act with assurance and actually improve the performance of the business.
In our U.S. plant example, this highlighted high use/high problem areas to be boiler ash/economizer and ash handling. Next came sootblowing, control and boiler fuel feed systems. That allowed the plant to prioritize these frequently performed tasks with frequent problems to determine the areas management needs to review and conduct improvement actions.
Based upon this foundation of understanding from a workforce analysis, what do you do with the results? Here are a few broad tips:
High certainty and frequent problems: This indicates the need for process improvement before engaging in any training. That’s because employees think they know, so training gains will be impaired until process improvement is successfully carried out.
Low certainty and frequent problems: Training staff must be done to teach them their jobs.
High certainty and few errors, with high attrition risk: Capture the knowledge from those employees as they know what they are doing and this data must be institutionalized so that it remains within the organization regardless of attrition. This will help avoid one of the most common problems of wasting knowledge capture efforts on areas that suffer from high errors or low employee capability.
The capability of the workforce can be directly linked to plant performance. Poorly performing workers generate about 50 percent of unplanned downtime. Therefore, an operational analysis of the workforce is vital to prevent outages. Further, by investing in the workforce itself as covered above, workforce programs are transformed from a cost to a direct revenue generator.
Author: Brad Kamph is president of Interliance Consulting, Inc., a 20-year veteran in the development of workforce, knowledge management, process optimization and performance measurement strategies for energy companies.