Thanks to the 29-year-old’s quest for continuous learning, Engineered Specialty Products has an incentive program that has increased productivity and improved efficiency in the warehouse.
Ask Operations Manager Tony Moore what’s been most satisfying about his six years at Engineered Specialty Products (ESP) and he launches into a conversation about departmental metrics. The pay-for-performance program he developed in 2017 for the gauge and temperature instruments manufacturer has led to many improvements, including a reduction in processing errors, a six-day drop in average shipping times and a 30% increase in pay for some warehouse employees. “It’s gratifying to see where we’ve come from and where we’re continuing to go,” says Moore, a self-proclaimed data junkie. “This may sound cliché but what is most satisfying is taking the traditional stepchild, Operations, and being able to market its successes, and give credit to the all-stars we have in our department.”
That’s his passion — helping the 20-plus people on his team find their place in distribution and advance their careers. “When ESP acquired Weksler [Glass Thermometer Corp.], I was able to take one of our team members to Virginia to document their processes,” says Moore. “Prior to joining our company, she worked in the school system. I hired her as a temp to work on a short-term project for us during the summer. All day, every day, she sat at a picnic table and reworked gauges. There were thousands of them. She was only supposed to be here for a month. Three years later, she is our production lead.”
Moore has a similar story. Intent on remaining debt-free while attending Kennesaw State University, he applied for a job as a receiving clerk at KSU’s Central Receiving and Distribution. Temporary work during the summer progressed into months of thinking of ways to become indispensable, which eventually led to a promotion to department manager, six years in Receiving and Distribution, and a revelation about what Moore, then 24, wanted to do with his life — continue to work in distribution and lead.
“Around the same time,” he says, “I learned that ESP had been purchased by a private equity firm and they had an aggressive growth strategy. I interviewed with them and was offered the operations manager position.”
The Inspiration Behind Pay-for-Performance
From shadowing his former managers at KSU to volunteering to fill a vacancy in digital marketing while still performing his duties as operations manager at ESP, Moore is forever learning and testing out theories. “I am always trying to get involved in every aspect of the business,” says the 29-year-old manager.
He is a perpetual rookie, described in author Liz Wiseman’s book Rookie Smarts as a successful professional who, despite years of experience, maintains their rookie smarts or “their ability to think and approach their work as if they were doing it for the first time.” Shared traits among this group are an insatiable curiosity, an abhorrence of mediocrity and a proclivity toward risk mitigation.
“Some people think I’m risk-averse but in reality, it’s just that I value analysis,” says Moore, whose first project when he arrived at Engineered Specialty Products was to oversee the implementation of its warehouse management system. “I like to know as much as I can before making a decision. Having the right data allows me to do that.”
His constant scrutiny of performance metrics, and the desire to incentivize his team are what inspired the pay-for-performance program ESP’s leadership says is responsible for the 99.96% accuracy rate Operations sustained over a six-month period.
“We’re not a company that hands out raises just because it’s the end of the year but it’s no secret that employees want them. So, I met with my team and we began to talk about how to justify pay raises,” Moore says. “We had to show that we were saving money or making money and started to think through how we could measure productivity and increase it over time.”
Engineered Specialty Products CEO Brien Whitford reviewed Moore’s eventual proposal and agreed to allocate $24,000 annually, or $2,000 a month, to a bonus pool. Now, twice a month, warehouse employees receive a report card that rates their productivity based on the completion of activities in five buckets: cycle counting, picking, put away, receiving and production for value-add. It also compares their current performance to past performances and measures it against the average peer performance.
On the days that Operations surpasses its shipping goals, an extra $100 is added to the pool. Top performers, says Moore, can potentially take home an extra paycheck by working in other areas of the warehouse.
“When we begin to design the pay-for-performance program,” he says, “we wanted to do it in a way that would incentivize people to participate in multiple activities around the warehouse. To compete with companies that are triple our size, we have to be nimble. So, we implemented a strategy to cross-train all our warehouse employees across all operations activities. That is one of the ways we’re able to compete in the market, as well as distinguish ourselves from the other distribution companies in our area advertising employment for $15 and $18 an hour.
“Giving our employees an opportunity to train throughout the organization adds value,” he says. “It makes them happier, more productive and we can delegate more. People enjoy learning other activities and knowing that they can excel in more than one area.”