Warehouse Distribution Software for advanced Distribution Management

How are your employees’ grades?

If your employees want the good stuff, they must make themselves invaluable.

What do you suppose grades and report cards have to do with your distribution business?

1. We give our people regular evaluations of what’s expected and how they are doing.
2. We try to give our staff some feedback but we don’t do it regularly or often enough.
3. Grades and report cards are for school kids, not for us. Our employees are adults.

College kids return home at Thanksgiving to see family and friends and to report on how things are going back on campus. Inevitably the conversation with parents turns to tests, papers, upcoming exams and of course grades. This time of year the older high school students are getting ready to apply to college or are waiting to hear from the schools they applied to. Much of the conversation is about grade point averages, class rank, SAT/ACT scores and letters of recommendation.

We encourage wholesale distributors to use performance management methods to give their people the information they need to meet and exceed their company’s expectations. Employees coming into the workforce from school are accustomed to knowing what they have to do to get good grades. Unfortunately most distribution businesses do a poor job at managing employee performance.

Most distributor staff members have direct contact with customers and/or suppliers. Strong performance management starts with telling your employees what you expect and how they are doing: the equivalent of grades and report cards. The focus of performance management is honing their skills, getting along with other people and gaining experience. Performance management is not limited to disciplining bad behavior and negative attitudes.

Let’s divide distributor employees into four groups based on levels of performance.

I.  “A” employees: They would be sorely missed by coworkers, customers and suppliers

“A” connotes excellence. Superb employees create so much value that other staff members are crestfallen when A players leave the company. Customers and suppliers who worked with them will want to know why they left – and they may be interested in recruiting them for their own companies.

• The A players know who they are. The staff knows who their excellent teammates are. The top performers must be recognized and rewarded.
• Whether we are referring to sales reps, warehouse and delivery staff, office employees or any other position, God’s gifts are not handed out equally. Also, some people simply try harder and get better results. Treating and compensating everyone equally is not fair to the top performers – and risks turnover of the people you most need to keep.
• Staff members need to be told where they stand and what changes are needed to improve their performance. The evaluation should be at least once each year, preferably more often, and should not be in the same meeting when pay changes are communicated.

Top performers are talented people with strong people skills. They learn quickly, and the more experience they gain the more valuable they become. They represent  an enormous asset value that is not on your balance sheet.

II. “B” employees: They would be missed

“B” players are highly valued and many have the potential to become A performers.

• Employees with a B rating do a good job most of the time and often do excellent work.
• Customers, suppliers and fellow employees miss the good people when they leave.
• Coaching the B employees can yield the greatest rewards. Managers need to encourage and cultivate the talents and people skills of their good
  performers.

Effective coaching of the good performers develops their talents and provides the experiences that will result in more top performers.

III. “C” employees – They would not be missed

“C” stands for mediocrity. You cannot build a high performance distribution business with a lackluster workforce. Unremarkable workers who leave aren’t missed by customers, suppliers or their fellow workers.

• Assuming they are well managed, a missing ingredient is holding the C employees back – lack of talent, poor people chemistry or minimal effort.
• The C-level performers deserve an honest evaluation so they can decide if they are willing and able to make the strong push needed to become good or excellent employees.
• Managers need to decide if coaching a particular C player is likely to result in a good employee or is not a good investment.
• These employees are easily replaced, most often by someone who almost immediately makes a better contribution.

Managers tolerate mediocre workers especially in tight labor markets, but managers may be too lazy to go out and find people who have more talent, better people chemistry and are more highly motivated.

IV.  “D” employees – People will be glad they’re gone

Most managers reluctantly admit that they have some below average “D” employees.

• Team members and people outside the company (customers and suppliers included) wonder how these employees are tolerated.
• Subpar workers demoralize the hardworking employees, give poor service to customers and suppliers and make costly errors. They also make management look incompetent.

Inadequate employees are people who should not have been hired. Spending time and money trying to train workers who lack talent, people skills or both is a waste of valuable resources.

In summary, wholesale distribution is a people business where most employees have direct contact with customers and suppliers. Grading employees is a good way to start building a performance management system. The distributors with the best employees win.