Performance Management in Manufacturing: 7 Strategies to Fuel Success

Performance-Management-Strategies-for-Manufacturing2Manufacturing companies are in the depths of a talent crisis. 68 percent of the fastest growing, middle market manufacturing companies say talent management is extremely or very challenging. And industry quit rates are at an all time high.

On top of rapid change and disruption caused by the COVID-19 pandemic, manufacturing companies are hard-pressed to find, grow, and keep skilled talent.


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Those charged with managing talent and improving employee experience have little to no visibility into what’s happening with performance across different shifts, teams, departments, and locations. And workers often complain of unfair treatment, lack of care, and feeling unvalued at work.

To grow and thrive in a Manufacturing 4.0 world, manufacturing companies need performance management processes, tools, and systems that increase visibility, improve agility, engage workers, and drive business success.

In this blog, you will learn:

  • How to define performance management
  • The importance of performance management in manufacturing
  • The benefits of performance management in manufacturing
  • The top KPIs in manufacturing
  • 7 strategies for effective performance management in manufacturing
  • The future of performance management in manufacturing


What is Performance Management?


Performance management is the strategy an organization uses to motivate, measure, and develop the performance of its employees to support the organization's goals. These strategies can focus on the entire organization, specific teams or departments, or an employee’s individual job performance.

An effective performance management strategy focuses on performance enablement, trust, development, and growth. Successful strategies set a clear path to success, enabling employees to perform well and accomplish meaningful goals.


The Importance of Performance Management in Manufacturing


Performance management is critical to the success of any organization, in any industry. But manufacturing’s fast-paced, routine-oriented nature makes performance management more challenging. With many shifts and leaders, often dispersed across various locations, it’s tough to understand where performance is excelling or lacking. Outcomes are often produced at a pace that's hard to measure.

So, creating effective performance management strategies in manufacturing organizations is essential to the success of employees, teams, and the business. The right performance management system can align, connect, and support your employees to drive company-wide outcomes.


The Benefits of Performance Management Systems in Manufacturing


The benefits of effective performance management systems in manufacturing organizations are abundant. When leaders leverage the right tools and processes to support and develop their workforce, they benefit from:

  • Increased organizational alignment
  • Increased productivity
  • Increased employee morale and engagement
  • Higher rate of employee growth and development
  • More appropriately skilled workers
  • Improved accountability
  • Better talent retention
  • Clarity around potential risks
  • High business performance


The Top KPIs in Manufacturing


Assessing performance in the manufacturing industry can be difficult. But measurable key performance indicators help gauge the productivity of your workforce. Being conscious of these metrics helps you understand and accelerate employee and business success:

  • Production quality
  • Performance to schedule
  • Labor productivity
  • Machine productivity
  • Effective output
  • Labor use
  • Scrap analysis
  • Machine output
  • Time from order to shipment
  • Progress on safety objectives


7 Performance Management Strategies for Manufacturing


1. Line-shift goals.

When tasks are routine, it can be easy to lose motivation or burn out. Team and individual goals give employees a purpose that makes their environment fresh and exciting.

Distinguish clear and concise goals for each line shift or individual.  The goals that get communicated the most are what your employees will pay attention to. For example, if your goal is safety, encourage employees to keep their workstations clean to prevent trips or falls. If the goal is output, create a goal that outlines the desired amount of product produced per hour.

Be specific to help employees best reach goals and create business outcomes.


2. Individualized conversations.

The fast-paced nature of the manufacturing industry can make 1-on-1s difficult. But creating space and time for monthly conversations with each employee is important. This can be a simple 2-5 minute conversation to ask employees how they are doing. Leveraging these conversations makes employees feel heard and appreciated.

In addition, regular check-ins allow leaders to stay updated with the challenges and successes of their employees. This helps leaders provide the feedback and recognition that employees need to stay productive and engaged.


3. Alignment initiatives.

Leaders should leverage transparent communication to align employees’ daily tasks with organizational outcomes. By providing insight into the company’s broader vision, employees will better understand the importance of their efforts. In turn, their motivation and productivity increases as they see the fruits of their labor. 

Also, your alignment strategies let employees know that their role is valued by the company, from top to bottom. This boosts respect and appreciation to increase the employee experience. Communicating the relationship between employees’ tasks and company-wide outcomes is essential to safeguarding employee alignment and productivity. 


4. Continuous listening.

Your employees need to feel valued and listened to. An effective way to do this is by asking for and leveraging their feedback.

Your frontline employees are on the floor everyday, hands-on and pushing outcomes. They have valuable insight into what processes and systems can be improved upon to be more effective, efficient, and engaging.

Effective listening strategies are a win-win. The right employee feedback can increase output and revenue, while making employees feel respected and acknowledged.


5. Regular check-ins.

A key component of any effective performance management strategy is regular check-ins. In any industry, teams and leaders should regularly communicate to address agendas, challenges, goals, and successes. To create high performing teams in manufacturing, leverage on-the-spot conversations. This includes shift huddles, recognition, and quick team meetings when possible. 

These check-ins can serve as encouragement opportunities to boost employee morale. Employees can also leverage check-ins to discuss possible concerns or roadblocks. When leaders and teams are on the same page, productivity, safety, and employee engagement levels increase.


6. Development and coaching initiatives.

Close internal skill gaps by providing certifications, training, and learning opportunities. Give employees the opportunity to up-skill or re-skill. This helps employees feel like they have a future at the company and makes your understanding of their high potential clear.

Another valuable way to encourage employee growth is by training managers to act as coaches.

Create an environment of trust to ensure your coaching initiatives are effective and helpful. Give feedback (and ask for it), offer solutions to challenges, ask questions, and provide simple, direct tips to help employees build their skills. This approach helps build connections, communicates respect, and helps employees grow.


7. Performance management software.

Implement an integrated performance management software to streamline every facet of your performance strategy. In doing this, you engage and motivate employees to do their best work. You also give leaders the visibility they need into the workforce, performance, and talent risk.

Look for a performance management platform that offers you these features:

  • Goals make business objectives clear and align teams and individuals across locations, departments, and levels. Effective goal-setting tools allow employees to create key steps and track their progress on a platform visible to the entire organization.
  • 1-on-1s increase connections between supervisors and workers, create a culture of care, and improve communication and alignment. The best 1-on-1 platforms provide customizable templates to ensure that all points of interest are touched on in each conversation.
  • Feedback helps you give and receive the performance feedback that could impact the metrics you care about the most. Great feedback platforms leverage a transactional model where both managers and employees can provide and gather feedback.
  • Recognition elevates big and small contributions that impact business success, showing employees that you see and value their hard work. Leverage a peer-to-peer recognition platform to increase alignment and appreciation from top to bottom.
  • Talent reviews help leaders understand the big picture of their talent, assess employee talent, and prepare leaders for talent risk. Make strategic talent decisions with effective talent review tools.
  • Surveys enable leaders to listen to their workforce and build strategies, systems, and processes that are realistic and meaningful. The best platforms provide regular surveys to keep leaders attuned to their employees thoughts, perceptions, and suggested tips for improvement, big or small.
  • People analytics create more visibility and an increased understanding of what’s happening across the workforce so leaders can understand, avoid, and manage risk and talent effectively. Effective platforms make employee data visible in real time to identify workplace opportunities and threats.


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The Future of Performance Management in Manufacturing


The future of performance management in manufacturing prioritizes employee autonomy. Performance management systems will help organizational leaders view their workforce as humans, first and foremost. Providing the respect, connection, benefits, and pay that employees deserve is critical in making employees feel valued.

As manufacturing organizations continue to attempt to recruit and retain loyal, high performing workers, leaders must act with respect, equity, and kindness. This creates an environment geared for the future to help employees continue to adapt and grow.

Performance management in manufacturing is unique, but critical. Invest in employee, team, and business success with a robust platform that drives employee performance. With the right strategies and a platform to support your workers, effective performance management becomes second nature. Employee success drives business success in all industries, and this reality will be apparent in manufacturing for years to come.



Ready to improve your methods for measuring and developing employee success? Learn our tips in 3 Ways HR is Driving Success in the Industrial Sector

performance management in manufacturing ebook

Published October 21, 2021 | Written By Elise Paulsen