Sales of labor management systems are on the rise. In fact, labor management is one of the fastest growing segments of the supply chain software market. According to analysts at ARC Advisory (781-471-1000), pairing labor management software with engineered labor standards can increase picking productivity by 30%. A properly installed system, they say, can pay for itself in less than a year.

But amid all the technical challenges of getting a new labor management program up and running, it's easy to forget that “labor” means “people.”

Choosing the right software, interfacing it with your warehouse management system, inputting data about your facility, defining your labor standards—all of these are important. But when you're introducing a labor management program, nothing is as critical as focusing on your people.

Experts agree that what makes or breaks a labor management program is whether employees have the tools they need to succeed in their new working environment. As a manager, it's your job to provide these tools, which include:

• proper preparation and training,
• a way to track workers' progress and, often,
• an incentive program for rewarding high performance.

Implementing a labor management program dramatically changes the culture of a workplace. Preparing employees for that change requires months of training and communication.

Long before the software is installed, experts say managers should hold a series of meetings to discuss the new program with employees. During these meetings, “do some listening in addition to talking,” says Dan Jacobsen, manager at Sedlak (216-206-4700), an Ohio-based consulting firm.

Listen to your employees' concerns, he says, and be ready to answer specific questions about why and how the program is being implemented. Keep your ears open for employee suggestions, too, as people are more likely to accept a program they helped shape.

When it comes to training employees, most companies focus on the associates on the floor, says Charles Zosel, vice president at consulting firm Tom Zosel Associates (847-540-6543). But it's the supervisors, he says, who face the most change.

“Almost everything they do today, they will do differently tomorrow,” Zosel says. The software will take care of many of the mundane tasks supervisors are accustomed to doing, he says, freeing them up to coach and counsel their associates based on system feedback.

Labor management software puts powerful information at supervisors' fingertips. “That information can be used as a hammer, a saw or even a whip,” Zosel says, so it's important to teach supervisors to use the information properly.

If reports show an associate is performing poorly, the supervisor should speak with the associate to confirm the reports are correct, observe the associate's work to see where his or her methodology is faulty, and then coach the associate toward better performance.

If observation and coaching aren't part of your supervisors' regular routines, they may need intensive training to perform those tasks successfully.

When associates begin working against the labor standards outlined in your labor management program, they'll need some way to track their progress.

Sedlak's Jacobsen suggests regular meetings between supervisor and associate to review performance. Be careful with simply handing reports to associates, he says, because it's easy to misconstrue raw data.

Zosel says it's possible to configure RF guns and voice headsets to give employees regular progress reports. That requires a lot of technology integration, he says, and may provide too much feedback. “The goal is to drive consistent performance, not for people to work, work, work, and then slow down.”

That said, Zosel is a proponent of frequent feedback. “The more people know about their performance, the better they'll perform,” he says. Some companies post reports at breaks, at lunch time and at the end of the day. “Daily feedback is often best,” Zosel says, “but I wouldn't go longer than that.”

In addition to reporting on individual performance, most experts recommend posting team-level performance statistics. Larry Parker, a consultant with TranSystems | ESYNC (419-469-2279, www.esync.com), says he's a big fan of score boards. He recommends using a large bulletin board or white board to post team-level statistics on a daily, weekly and monthly basis.

Incentive programs that reward employees for performing above standards are often part of a labor management program. Whether you choose to offer incentives and how you structure them affects the way your employees view your program.

Parker says he would never put in labor standards without an incentive program. Without incentives, he says, employees can meet their labor standards and receive nothing but their regular pay, or they can work slowly and qualify for overtime pay. Most of the time, he says, they'll choose overtime.

Zosel, on the other hand, says he recommends incentive programs to fewer than half his clients. Getting an incentive program right is really difficult, he says. “I don't recommend going into it lightly.”

An improperly designed incentive program can encourage productivity at the expense of quality, safety and teamwork, he says.

In addition, employees often feel entitled to their incentives—especially when the incentive is strictly financial—and that makes a supervisor's job more difficult. For example, an incentive program makes it harder to convince an associate to lend a hand in an unfamiliar department where he knows he'll be less productive.

Often, Zosel says, the natural benefits of a labor management program (a clear understanding of management's expectations, improved communication between associates and supervisors, less unexpected overtime, etc.) are enough to motivate employees to accept the program.

If you decide incentives are right for your workforce, Zosel says, you may want to consider something other than financial incentives, such as additional time off or coupons to the company store. The key, he says, is to tailor your incentives to what motivates your workforce.

If you're giving financial incentives, Parker recommends paying them by separate check so the money stands out. And never give incentive pay based purely on productivity, he says: your program should include disqualifiers or add-ons for safety, quality and other metrics you deem important.