DC Velocity - March 2016

technologyreview LMS

2To provide real-time performance feedback. Operating under the assumption that an informed worker is a pro- ductive worker, some DCs have set up their operations so that LMS-generated performance data can be seen in every corner of the warehouse. Using large dashboard displays, many warehouse managers post real-time performance updates so workers can measure their progress against pre-set goals.

“An LMS can be used to track, reward, benefit, and incent,”
says Jason Franklin, product manager for labor and business
intelligence at Intelligrated Software. “Workers like friendly
competition—to be judged and to see who won.”
In addition to motivating workers to work more efficiently,
sharing performance data in a public space can build employ-
ees’ trust in the overall incentive system, Franklin says. By
offering a transparent picture of performance, managers
encourage workers to compare themselves with their peers as
they all work toward long-term goals.

Despite these benefits, some experts warn that displaying LMS data on public dashboards can distract some warehouse workers from their primary jobs—particularly if they’re constantly checking the scoreboard. There’s also the risk that they’ll cut corners on safety if they’re running behind, or slack off after a busy morning when they see they’ll easily make their daily quota.

“We have found that when we put that information on dis-
play, people who were performing well above average ended
up going slower, just to fill up the allotted time,” reports
John Kuerschner, vice president for supply chain solutions at
HighJump Software Inc. “They were normalizing their behav-
ior to meet the expectation.”
Managers don’t have to turn off dashboards entirely to
avoid these outcomes, Kuerschner says. They can provide
LMS data only for certain workers, aggregate the data for
a team of employees, or provide incentive-based pay that’s
based on a combination of individual and team performance.

3To boost worker retention. In addition to helping boost worker efficiency on the warehouse floor, LMS platforms can be effective tools for retaining current employees and even recruiting new workers, says Gary Allen, Ryder’s vice president for supply chain excellence.

By linking LMS metrics to employees’ paychecks, a company can reward its best workers with higher compensation. And the rewards don’t have to be monetary. Some operations link workers’ performance to nonfinancial incentives. For instance, in some DCs, workers who hit their targets can earn extra vacation hours, prizes, or an invitation to a weekly pizza party.

While linking performance to rewards can be a strong incentive, some managers warn that it can be a tough sell initially. That’s because employees often need time to adjust to the idea that their daily performance is an open book. Their reluctance tends to diminish as workers see the benefits of greater transparency in their compensation structure.

Not all employees are averse to the idea, however. Workers from the millennial generation, who are accustomed to living

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