People Power: Employees are assets, not costs

By Bob Milligan

For at least two decades, we have heard the phrase: “Employees are assets not costs.”  The phrase represents a major shift in how employees are managed by world-class businesses, including dairy farms.  In this column we will explore this phrase and the shift in how employees are managed.

For costs (feed, fertilizer, medicines, etc.), we seek to determine the optimum amount, always keeping in mind good cost control.  For assets (investments  such as land, machinery and cows), we try to determine how to use that asset to get the greatest return.  A tractor, for example, does no us no good until we use it.  It must be maintained and repaired to maximize the return on the investment. How we manage the investment in the tractor has a great impact on the return from our investment.

Employees are very different than other assets. They can think, have feelings and multiple talents.  We must still consider what it takes to get the greatest return from this asset.
How we manage employees (partners and family members, as well) has a great impact on employee productivity and job satisfaction.

Gaining this great return in employee productivity and satisfaction starts with our attitude toward employees and permeates how we manage employees.

Let me begin this discussion with a story:

Several years ago after a presentation at a nursery and greenhouse conference, “George” approached me and told me his story.  He indicated he had worked for a small landscape business for 23 years.  In looking back, he concluded he was a terrible employee.  He took all of his vacation and all of his sick leave — whether he was sick or not.  He did the minimum.  His justification was that everyone did the same, because the owner/supervisor provided no clarity or feedback.

When his employment at that business ended, he found a job with another small landscape business. The owner/supervisor provided clarity of expectations, feedback and, generally, encouragement and support.  George indicated he now works hard, enjoys what he is doing, and believes he is an excellent employee.

George’s productivity and job satisfaction were dramatically different in working for the two similar businesses. “What was the difference?”

Obviously, George was older. However, few of us change our values, personality or motivation sufficiently to explain the difference.  The difference was the owner/supervisor.  The first owner/supervisor did little to manage his asset –- George –- and received little in return.  The second owner/supervisor worked to manage, supervise and coach George, and his efforts were rewarded with an excellent employee.

This story and the phrase “employees are assets not costs” reflect a great change in recommended practices for supervising and coaching employees.  I call the old approach that viewed employees as costs the “control focused” school of supervision.  The newer approach (emanating from the quality movement and excellent research on supervision) I call the “quality focused” school of supervision.

The following table compares the two approaches:

Control focused                                       Quality focused
Employees are                                   A cost                                                     An asset

Role of supervisor             Tells employees what to do                 Ensures employees succeed

Core value                              Based on compliance                              Based on fairness

Supervisor activities                 Training, directing,                               Training, directing,                                                                  reprimanding, discharging                    reprimanding, discharging                                                                                                           coaching,  mentoring,                                                                                                          encouraging, rewarding,                                                                                                            empowering, redirecting,                                                                                                                 holding accountable

Informal name for supervisor                     boss                                             coach

I believe essentially every business, including a dairy farm, is in the process of moving from “control focused” to “quality focused.” It is a difficult, but rewarding journey.  The rewards are personal and financial for both the owners/supervisors and the employees.

Four pillars of quality-focused programs

The following are the four pillars of a world class “quality-focused” human resource program:
1) The recruitment and selection program attracts workforce members (owner, family and employees) with the competencies –- knowledge, skills, experience, attitudes and behaviors — to succeed.
2) Workforce members are selected, oriented, developed and given responsibilities/expectations that utilize and build on each workforce member’s unique competencies, strengths and potential to grow and develop.
3) The work environment provided by the owner/leader/managers inspires and motivates each workforce member to contribute to the success of the farm.
4) Each workforce members is provided the tools -– training, quality assurance, coaching and feedback –- that enable them to succeed.

The four are not independent; however, they all are dependent upon the third pillar.  The owners, leaders and managers of your dairy farm or other business are responsible for developing an environment that inspires and motivates every member of the workforce and leads to superior productivity and extraordinary job satisfaction.
Establishing these four pillars in a dairy farm or other business is not easy.  You may need help just as you do with nutrition, herd health, machinery repair, etc.  We will investigate each of these pillars in upcoming columns.

FYI
• Robert Milligan is senior consultant, Dairy Strategies LLC, and professor emeritus, Cornell University. He can be reached at 888-249-3244, ext. 255, e-mail: rmilligan@trsmith.com, or log on to www.dairystrategies.com.

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