Achieving Spirited Self-Management

By Peters, Tom | THE JOURNAL RECORD, October 27, 1988 | Go to article overview

Achieving Spirited Self-Management


Peters, Tom, THE JOURNAL RECORD


The WIX Division of $4.75 billion Dana Corp. makes filters for everything from lawnmowers to locomotives. After managers from the division visited Japan, they initiated a continuous improvement program, intended to be a carbon copy of what they had observed. It became a monster.

``We started Americanizing our system, and just tried to make it as complicated as we possibly could,'' the division general manager recently reported to TEI Total Employee Involvement Newsletter. The program flopped.

But the WIX managers persisted, finally achieving success. The secret of the revised system:

``No supervisor sign-offs, no points assigned, no cash awards. When employees have an idea, they are authorized to implement it without checking with higher-ups. They can spend up to $100 without clearing it with anyone.''

All the worker does, is ``write it down on a card, along with his or her name, the plant, department and shift. He or she tells how many people worked on the project and gives their names on the back. They record the date of implementation.''

Dana believes in a simple system, fueled by ``the satisfaction of becoming a self-manager.'' Others, such as NUMMI (the GM-Toyota joint venture) and Harley-Davidson, also emphasize the inherent value of a self-managed improvement process.

This is, more or less, the Japanese approach as well. Their vaunted suggestion systems includes rewards (so does NUMMI's) but they are insubstantial.

On the other hand, an executive at Sutter Health of Sacramento, Calif., who was forced to slash costs, chose another strategy.

Having had little success with meticulously calculated budget reduction targets, he turned to a dramatic productivity sharing program. Employees get half the savings from successfully implemented ideas, as long as quality doesn't sag.

In just six months, $2 million in unexpected savings have been unearthed. Employees stand to pocket $1 million.

Sutter Health is not alone in the path it has taken. 3M, in several plants, also splits savings from productivity gains down the middle with workers. Under the banner of the Scanlon Plan (a gain-sharing method developed in the 1930s), Lincoln Electric, the half-billion dollar (revenue) maker of arc-welding machines, motors et. al., has awarded bonuses that have averaged 95 percent of base pay over the last 48 years. And steelmaker Nucor's weekly productivity bonuses yield $17,000 a year in extra pay for the average worker.

So which is it? Small awards and the joys of self-management? Or a carrot of 24-carat gold?

There is no simple answer. John McConnell, founder of steelmaker Worthington Industries, is another subscriber to the big-bucks bonus theory. But he doesn't see the bonus as a motivator. Instead, he calls it just one part of the overall recognition process.

All it amounts to, he insists, is a pat on the back for a job well done (worth more than $10,000 a year for the average line worker).

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