LITTLE PRODUCTION SYSTEM
Payment
The remuneration system describes the link between performance, qualification, commitment and payment.
In this article me make it short and simple.
Definition
The remuneration system describes the link between performance, qualification, commitment and payment.
The targets:
Mobilization and utilization of the performance potentials of people, resources and organization. Remuneration is an important management instrument.
Key elements:
System is simple, transparent and variable (+ / - ) and uniform for all collective agreement employees
Qualification and requirements
Result orientation (company, division)
Coupling to standards for team/employees
Achievement of objectives (team / employees)
Special bonuses
Performance reviews
Level of fulfillment payment
Level 1
The remuneration system is based on a description of requirements and the corresponding needs-oriented qualification for the individual workstation. Service components are partly fixed and partly variable. Target values of the employees are the degree of time and the "front water". Non-systemized, special payment independent of results at company level. No special bonuses.
Level 2
There are several charging systems. Bonus wages and other performance components are partly fixed and partly variable. Linking to performance standards is not practiced. The remuneration systems allow premiums for successful special promotions. Inconsistent, sporadic application
Level 3
Only the premium wage and the time wage exist in production. The first concepts for a uniform payment system have been developed. The remuneration systems are based on a description of requirements and the corresponding needs-oriented qualification related to individual workstations and group work. Service components are partly fixed and partly variable and linked to performance standards.
Level 4
A uniform remuneration system for wage earners has been developed and implemented in a cost-neutral manner. A uniform remuneration system has been developed and adopted for all levels. The basic performance component is linked to minimum conditions (fixed). The variable component is defined and linked to targets. Behavioural characteristics (e.g. compliance with standards) are taken into account. The remuneration system applies bonuses for defined and successful special promotions
Level 5
A uniform fee system has been implemented at all levels without affecting costs. The remuneration system is based on a description of requirements and the corresponding needs-oriented qualification for teamwork (comparison with teamwork). The variable component is defined and linked to targets. Participation in company results, divisional results according to the target agreement.
Target Setting
Target setting and success management describes a continuous goal agreement process, which starts with the company vision and extends to the executing team or employee. Thus all employees work target-oriented on the success of the company.
Target setting and success management is crucial for the success of all companies. If you don’t know where you want to be, sooner or later you will be lost. In this article of the series “the little production system” we will have a look at the target setting and how you can evaluate it for your organization.
Definition
Target setting and success management describes a continuous target agreement process, which starts with the company vision and extends to the executing team or employee. Thus all employees work target-oriented on the success of the company.
The targets:
The formation of objectives leads to an orientation towards common process and result objectives
The contribution to the corporate targets is ensured by the creation of measurement variables and continuous control of the achievement of objectives
Every employee recognizes his or her contribution to the achievement of the company's targets and feels committed to "his or her" goal
The achievement of objectives increases motivation and willingness to improve performance
Key elements:
Company vision
Company targets
Strategic objectives
Operational objectives
Result targets / process targets
3-level voting
Interdepartmental coordination
Visualization in the responsible area
Consistent, transparent and standardized system
Freedom of action within the framework of concerted action
Dealing with deviations
Adaptation of the objectives to changing conditions (3 levels)
KPI
Degree of target achievement
Target setting and Measurements level of fulfillment
Level 4
Divisional targets are based on strategic and operational planning The goal formation process is consistent in all divisions. The process is coordinated across all divisions. Action plans are in place at divisional/cost center level to achieve the targets.
Level 5
Target agreement is carried out via 3-level coordination
Goals are coordinated across divisions
Goals are quantified
Individual goals and common goals are in harmony
There are goals for all levels up to the group or employee
At least once a year the goal formation process takes place
Measures to achieve the objectives are defined and documented
Level of fulfillment - Success management
Level 4
KPIs are available. Possibilities for success control are used. Adaptation to changed conditions is carried out in part.
Level 5
Achievement of objectives and progress are reviewed regularly
In case of deviations, corrective measures are implemented and visualized
In the event of changes in the general conditions, the goals are adjusted
Information and communication
Level 4
There is a standardized reporting system. Targets/achievement of targets are communicated and visualized in all areas/cost centers/teams.
Level 5
Visualization of goals, achievement of goals and measures
There is a standard for the confirmation (bottom up) in case of deviations (+/- )
An integrated system has been installed and is used and lived in all areas and levels
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