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HIGHER PAY, BETTER
PERFORMANCE
While the benefits of streamlining
warehouse processes were signifi-
cant, Moore realized he could do
much more with the performance
metrics derived from the new WMS.
That led him to begin developing a
program to reward top performers
while fostering an employee-centric
culture.
Moore started by establishing a
cross-training program where ware-
house workers rotate responsibili-
ties. He used the WMS to track their
activities, then established baselines
for every transaction and assigned a dollar
value to each based on productivity. Soon,
ESP had enough data and performance
metrics to support a new pay-for-perfor-
mance program.
At first, Moore used a report-card
system, showing employees their data
charts, comparing their activities with the
average, and discussing what steps they
could take to improve. Next, he began
refining the program, using the WMS’s
transactions per hour (TPH) metric to
measure output. Then it was time to roll
out the pay-for-performance program.
Instead of giving raises, Moore says, the
company put the money it had allocated for raises into a general bonus pool.
Bonuses are paid out monthly based on
employees’ level of activity as tracked in
Latitude.
Under the new arrangement, the
number of transactions per individual
employee doesn’t matter, provided they
stay above the average TPH, Moore
explains. If the employee is working at
an above-average pace and is maintaining
accuracy, then he or she will be eligible for
incentive pay.
Employees immediately saw how the
new system could affect their paychecks.
“We had some workers [who] achieved
more than a 30% increase in pay because
of it,” Moore says. “In a group of 20
employees, it was pretty rare to have
more than four people who didn’t earn
at least something extra.” The WMS, he
adds, helps ESP find the high-produc-tivity “sweet spot” for employees while
aligning the company’s goals for them
with their goals for themselves.
The program has paid off handsomely for ESP too. Since implementing the
Latitude WMS, the company has reduced
its production and processing labor by
31.5% while simultaneously increasing
revenue by 22.7%. It didn’t take long
before Moore started thinking about
ways in which the WMS could help ESP
achieve other objectives. He’s now looking to capture date and time stamps
from order entries to better track shipment times and is considering how to use
the WMS data to improve other areas of
the business, such as sales and customer
service.
