Posted by: Matthew Molinari | April 18, 2011

Treadway Turnover (Blog #15)

Apparently, Treadway didn’t think much of the belief that you need to spend money to make money. Their belief was that they didn’t have the money to properly train their managers. They did admit that training them would have been a good idea.

That brings up a really interesting thought – is the company setting their employees up for failure? It seems like, at Treadwell, upper management was setting up the foreman for failure rather than success. There were lots of measurements in place to let the foreman know when they weren’t being successful but there was a complete lack of training to teach then foreman how to accomplish those goals.

The surprising thing was that the hiring process at Treadwell didn’t seem to match the implementation process. There was a rigorous hiring process that included a 4 hour test as well as follow up interviews. Treadwell was looking to hire the right people but then failed to train those people on how to actually be a success. Instead of looking to hire the right person on paper, Treadwell should have been looking for the right person to train.

It seems like Treadwell should have looked to the cost of its pre-employement screening and considered how much it cost to continually interview new hires. It seems like that cost could be saved by implementing a monthly training course to ensure that new hires stayed long-term. It wouldn’t be so much spending more money to promote on the job training as it would be moving money from continual pre-employement screening to new training regiments. The money was there it was just being used in the wrong way.

Treadwell was trying to fix the symptom without addressing the problem. The overall goal was to reduce turnover and therefore cut costs of hiring new employees. However, they were looking at turnover as the problem rather than seeing that it was a result of the system they had put in place. Treadwell believed that once the “turnover problem” at the Lima plant was resolved they could become the most productive Treadwell plant.

For example, a real problem that was causing turnover was the 12 hours shifts. The length of the shift created a myriad of problems that the foreman had to deal with. The shift length was determined to help cut costs but again, were those savings offset by the turnover it created?

The other issue was negative reinforcement. Performance reviews were done daily by comparing previous day numbers to the forecasted figures. Anything falling short resulted in severe discipline. The fear of punishment was used to try to solve problems rather than addressing the core issues that were causing budget shortfalls.

Treadwell really was setting up the foremen to fail and then looked passed all the causes and tried to fix the resulting problem. Every step along the way to employees leaving there were remedies available that were missed. The one question that was never was asked why are employees leaving?

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