TOP TEN reasons why Lean won't work in our industry: Reason #10 - Piecework

I asked "Why not LEAN in the greenhouse" in my last post. In upcoming posts I'm going to give the top ten reasons - other than "we're different" (which I hear plenty of, but it is too lame to consider at length).

I hope you'll consider these and respond with comments.

Reason number 10. "We pay piecework; if we paid by the hour we'd be dead."

This is a fascinating topic - when we bring people from other ornamental horticulture operations to see us they are amazed that we DON'T pay piece work. Why don't we? What does it have to do with Lean?

It's a long answer (you could write a BOOK) but in a nutshell we measure PROCESS not PEOPLE.

We set out to standardize work so we get the results we want in a predictable way, and we have a stable foundation to improve from. Given stable work processes, we can staff to get the work done and know that our employees will have full week, but not work overtime. This honors them and their needs, building trust and respect. We can track progress against takt time (how frequently we need to get something done to meet demand) without racing ahead. We expect consistent performance, productivity and quality from everyone. Most important from a process perspective, is that given clear workable standards, we can clearly see problems and opportunities to improve. If someone has a better (faster, easier, higher yield, etc.) way, we want to learn it and share it. It respects the fact that inputs and circumstances (individual, workplace, supplies and material) can vary and lead to varying results. This variation then becomes the subject of a PROBLEM SOLVING CONVERSATION, not a contest over incentive or piece pay.

Contrast this with piecework, or highly incentivized individual performance measures:

Typically, quality suffers or you need to institute extensive/intensive measures to inspect for quality and discard the defects you discover. Commonly, safety suffers also, as people race for their incentive. Again, policing for safe practice becomes the alternative to designing safe work. People will game the system to get their rate or incentive - more policing required, more defects to inspect out after the work is done! If someone has a better way, what is their incentive to share it? If the days work is a zero sum game (a fixed number of units), then by helping someone else they will only hurt themselves. This does not build an organization that is driven to continuous improvement.

So, you were right, piecework is not compatible with lean. But does that mean don't do lean? I don't think so. If all you want is short term results based on exploitive relationships, sure. But if you are in it for the long haul, want to delivery the best possible quality products and services, develop employees, reduce costs, and become more responsive to customer and market demands, then challenge yourself to make the other decision: embrace lean thinking and find a path out of piecework to a more collaborative, respectful relationship with employees. It's good for you and your employees and lays a foundation for continuous improvement for what you do for your customers.

This is far from an exhustive treatment of this question. See Toyota Talent, by Liker and Meier, for an in depth look at people in lean organizations and how we use standard work to engage, develop and improve.