Judit Farkas - CEO and founder of PsyOn - presentation at the Agro HR Conference, 2018.
In 1991, we entered the market in the Hungarian 'Silicon Valley'
with nine years of corporate experience behind us.
One size does not fit all.
We have a competitive advantage in the niche market of multinational companies, SMEs, and startups where robust or simplistic mainstream solutions have failed.
People management problems are similar for every company, but the real solution is always unique.
A successful solution for one company can only raise even more problems for another company.
Our clients receive practical, feasible, sustainable solutions.
As consultants, we stay in the background, putting solutions in the hands of managers and professionals that they identify with and that are deployed on a daily basis.
This is the basis of our long-term, mutually committed customer relationships.
The way we work - the steps of our projects that guarantee results
Identifying Customer Decision-Making Points
The positions involved in decision-making and the decisions to be made determine what data and in what form we provide.
Based on this, we determine the methodology to apply.
The company-specific evaluation categories are ensured through document analysis (job descriptions, org. chart, performance evaluation criteria, and elements of the incentive system of the positions in question) and / or job evaluation.
Integration into business processes
We ensure, that the data generated by the measurements reaches the decision-makers and that the decision support is maintained on the system level through integrating the process of data management into the existing processes.
Use the power of the hard data provided by our proven labor psychology tools to empower your leaders, execute your human strategy, and increase your business success, competitive advantage on the labor market and on the market of the goods and services.
CONTROL TURNOVER RATE
The 15% reduction in turnover we have achieved in four months has removed the pressure caused by the company's fear of shutting down customer production lines or losing customers.
Turnover is an essential part of development, change and operation.
However, its excessive degree causes disruptions and overload in companies due to a constant lack of capacity and knowledge.
We were part of a five-month continuous recruitment process. The original demand was to hire 10 people a week.
At the beginning of the second month, the company built our assessment into the selection. Over the four weeks, the turnover of the newcomers increased.
The weekly demand has increased to hire 25-30 people; in addition to the 10 people originally planned to be hired, new staff lost in the first working days also had to be replaced.
The situation has led to conflict between recruiters and managers. HR has worked hard to meet the needs of managers who, in HR’s view, do little to retain new employees. Leaders said the recruiters only hired headcount and not a valuable workforce.
The degree of turnover reduction achieved without changing the processes of interviewing, contracting, training, and onboarding in four months:
Turnover rate at the beginning of the assessments
Turnover rate after using the assessments for four months
How did we achieve it?
We have identified under- and over-performing people.
The first group left in the hope to find an easier job for the same pay. The second group was an easy target for companies offering better quality work, for better pay.
Based on the results, we made recommendations for the managers - who are best assigned to monotonous assembly work, who to SMT line, who to quality control, internal material handling, according to their individual working style.
The match between the individual working style and the nature of tasks is a key factor of retention; increases work satisfaction and ensures quick personal success.
Based on the personal degree of following the rules, we have defined the type of group and the leadership style with which the newcomer best fits.
The collaboration with many of our partners has grown beyond the 3-4 months project. The results that underlie management decisions have been incorporated into the onboarding and performance management processes. The regularization of measurements and management decisions and actions based on their results ensure long-term workforce stability and efficiency.
until you lose customers - if the turnover rate already compromising delivery, stabilize the workforce with our simple and quickly applicable tools.
CONTROL PERSONAL RISK LEVELS
In one year, we have brought the 10-12 fatalities of previous years down to zero.
According to statistics, an increase in the frequency of small accidents predicts the occurrence of serious accidents.
Tracking and analyzing near misses make the "alarm system" even more sensitive, triggering the right preventive actions in time.
The most common corrective action included in accident reports is „retraining the employee".
Besides striving for zero accidents, human risk management focuses on reducing the chances of associates having more accidents after the first one.
We conducted three years of computer simulation-based research with a high-risk occupational group.
The results show that the strongest factor influencing individual accident frequency is the person's drive for excessive control over the situation (people with one accident) or lack of control (people with multiple accidents).
Distribution of employees by frequency of accidents in professional groups with a high risk of accidents
(% person / occupational group)
Manage risk levels
License based Pass- No pass criteria
The baseline is to check if the associate is apt to operate a process (air traffic control, press or milling machines), an asset (forklift, crane, etc.).
In these jobs, in addition to the abilities (coordination of two hands, reactivity), we also measure compliance with the rules and discipline as factors that are essential for obtaining a license.
Managing priorities - the level of urgent and important
Decisions are determined by the relationship between the individual drive for performance and actual performance.
High motivation ignores the rules in order to deliver, and low motivation leads to an accident by losing orientation.
Dealing with uncertainty - the situational level
At this level, the control attitude that can be easily assessed with a five-minute task defines the line of actions.
People with extreme internal control attitude suffer or cause an accident because they feel they have control over every aspect of the situation.
The extreme external control attitude makes to ignore signs of danger, thus to the lack of responding to those - leading to an accident.
The factors of all three levels can be subject to change with time, with technological development, change in working hours and schedules, or with the change of leader or group.
Our partners who have a built-in initial (at contracting or before licensing) and regular evaluation at the system level have been successful in keeping accident rates low - for up to three decades.
If the safety
of the associates is one of the top values of your company, then increase the safety of work with our tools.
For three years, not a single verbal or written warning was given to staff who were assigned to the job, workplace and group which we have specified for them.
There are companies that minimize the disciplinary risks for compliance reasons when hiring employees.
There are managements that provide training to improve conflict handling techniques for the leaders.
If the training is not effective enough, it is followed by a comprehensive organizational development project.
There are leaders who move every stone before firing a staff member on a disciplinary basis. This is how employees are sent to our labor psychology laboratory for individual assessment.
Some of the typical cases that test the patience of leaders
Some leadership decisions are not implemented - there is no open counter-opinion, but things don’t happen.
Every 10 minutes they leave the crane or their place to drink water, fetch something. People leave their work stand and chat in small groups.
They are a little late on a regular basis, they leave a little earlier.
These situations usually end in conflict. The leader responds only to the symptoms by which the associates express that the daily activities are not in line with their personal task preference or social needs.
Distribution of cases by underlying causes of "undisciplined" behavior
Controlling disciplinary risks
In the case of financial institutions, security, or customer services, it is necessary to filter out those who do not operate the processes or do not do them in the right form before they are admitted.
Those in the moral gray zone are invisibly undermining the credibility of their group and company, so it is better to manage this risk proactively.
Creating win-win situation
There were projects where rearranging the physical space solved the problem. By arranging the workstations in a U-shape instead of a long line, it has become easy to talk to others to break the monotony of work.
This solution worked for people with a high level of tolerance for monotony, but with no tolerance to boredom. In addition to restoring "order", the rearrangement also increased the level of satisfaction and efficiency.
The same happens with highly extroverted people, who need frequent social contacts.
Opening channels of continuous communication removes the burden of feeling isolated.
Regular short absences are like small accidents - just as the intensification of the latter predicts the occurrence of a more serious event, the former means that the employee will either be out of work for a longer period (illness) or leave the company.
The punishment only reinforces the intention to leave.
Changing the job, the shift, or the group is a good chance of solving the problem because it moves the employee out of the state of discomfort.
Some of the problems that seem disciplinary can be solved conflict-free once and for all by recognizing the real causes instead of the symptoms.
Many times these problems are solved, but there is a level of tension caused by conflicts that cannot be reduced or managed without outside help.
associates just because it takes too long to find the tasks they are truly the best at.
UNLEASH THE POTENTIAL OF PEOPLE
Cost efficiency improvements of nearly 20% were achieved in the first quarter following the introduction of our performance management tools, and by the end of the year this figure had risen to nearly 30%.
Since 2004, we have worked with management at 17 companies, including startups, SMEs, and large multinationals, to clarify and deploy effective management systems and tools.
Our practical solutions differ from common management theories in three areas.
Management wanted to replace the annual one-time, competency-based performance appraisal system.
There were three reasons:
Role of a leader
A company lost two new entrants in a middle management position in half a year.
The first one resigned after a month, the second got into regular conflicts with both the top manager and the subordinates, this manager was fired by the company.
They were looking for a tool that would guarantee the success of the selection and the incorporation at the same time.
Incentive system - where leadership and performance meet
After the new commercial director’s first half-year, sales commissions dropped dramatically.
The company did not want to lose its employees, who had been working successfully for several years.
The means of retention were seen in the review of incentives.
An opposite case: the director of a manufacturing plant found that the newly introduced significant reward for 20% overperformance did not move people.
Previously, similar rewards brought record numbers.
We see such a chaotic state by measuring what an employee thinks over what performance indicators he or she has direct control of along with what others think about which indicators he or she has impact on.
top left chart - the self-assessment of the position holder about his / her own business impact;
the other three charts - what do the Marketing Department, Engineering staff, and management think about the impact of this position on performance indicators.
What no one else can achieve
From the data behind the graphs, it’s easy to clarify which job has a direct impact on which indicators - an ideal impact chart is created for each position.
This was also the case of the incorporation of the new leader - for what the position is not authorized, others should not expect, and vice versa - the leader should not make decisions that are under the control of others.
Instant and long-term results
It was necessary to find a tool that simultaneously and regularly communicates the impact profile of the position to both the job holder and the employees (including the manager).
The simultaneous use of three such tools leads to immediate and long-term results:
These performance management tools show that
If there is no impact, there is no improvement in results either
Incentives did not work for a simple reason.
The new commercial director changed the monthly agreements to annual framework contracts.
The machines were converted into a closed line at the plant.
Employees no longer had an impact on the value of the indicator that would have rewarded the change.
Implementation of preventive maintenance and the detection of unsafe situations.
The fact that we based the incentive on parameters that they could directly control brought the result.
The novelty was that the staff did not control the process, but the preconditions that made the process stable.
When we started working at the companies, 90% of the employees stated that they have a direct impact on 90% of the indicators.
By the end of the project, this number had fallen to 3-5.
This has reduced the workload of employees and increased efficiency.
It has also increased the number of decisions made in their own right and the number of innovative solutions.
If you really want to change
your business performance and not people, request our simple performance management tools and support.
BALANCE PERSONAL LOAD CAPACITY AND THE WORKLOAD
In the first month following the introduction of our measurements, the number of internal transfers fell by 75% and the number of new staff resignations by 87%.
While noise, light, and heat loads affect the human body equally, tolerance to monotony, mobility between tasks, and individual working style vary from individual to individual.
Overload or underload worsens the well-being of employees, increases dissatisfaction, and causes discomfort, which together reduces not only performance and efficiency but also the quality of cooperation (discipline).
For which part of the process?
The process is becoming increasingly complex, from simple, short-cycle, low-quality operations to longer-cycle labor-intensive, high-quality operations.
The fastest-learning operators had to be found for each of the five jobs in the process.
Which production unit?
Most of the new hires were relocated so many times in the first two months of incorporation that the company lost 30% of its new staff each month.
In addition, the morale of the workgroups deteriorated, they felt they had to do a lot of extra work because of the new hires, and they get fewer bonuses because their performance has become very fluctuating.
To rotate or not to rotate?
To break the monotony of work, and even more so that as many people as possible could perform as many operations as possible, every two hours each employee had to work in a different job position.
Based on the data for the first three months of the rotation system, the value of the efficiency indicator decreased, and the value of the scrap percentage increased.
Distribution of types of individual working styles (based on our ~ 50,000 assessments).
Types of individual working styles:
Quick - Inaccurate
Quick - Accurate
Slow - Inaccurate
Slow - Accurate
30% of people are born with a nervous system that tolerates monotony well, and another 30% are born with a nervous system that does not tolerate monotony.
A trait born with us, cannot be changed.
It can only be measured in a simulation; the nervous system must be placed under monotonic conditions.
For frequently repetitive, short operations, it is worth assigning employees with high tolerance to monotony to ensure a sense of comfort.
Rotation is specifically contraindicated for them; as it takes longer to adapt to the new operation, pieces are lost, and quality problems are more common.
Like tolerance to monotony, the individual working style is born with us.
This can only be identified in a performance simulation.
In jobs that require quality control, those employees are most productive for whom accuracy dominates over speed.
Fast and accurate employees perform well in jobs where they control the pace of work themselves (e.g., wire harness manufacturing), as well as in adapting to the pace of a production line.
The third factor that can only be measured by simulation is the mobility between tasks.
This is important due to the workload of employees with low monotony tolerance.
People with high mobility are successful in problem-solving, in the highly flexible individual or serial production, which gives them a sufficient workload.
Low-mobility employees are efficient in mass production, which does not overload them due to the low product- and operation- variety.
Our instrumental measurements for 30 years, and the online version has been providing the hard data that support people management decisions since 2017 in the form of ranks.
These data support employees being assigned to a “good at first” position and achieving success in the first few weeks that underpins not only their cooperation with the company in the long run but also the employee’s well-being and work-life balance.
Prevent staff burnout
in a few easy steps with our service.
WHICH MODEL OF DIGITAL TRANSFORMATION?
The planned six-month learning curve for the digital switchover was reduced to 3 months, with a 17% improvement in productivity.
For the workgroups and their leader, automation and digitization mean maintaining the pre-transformation results in some cases and improving the results in other cases.
The transformation process tests behavioral alternatives to achieve these goals.
With automation, the number of attended equipments has increased
Due to the highly variable order backlog within a month, the company management was looking for an automation option that would allow the operator with 2 machines to control up to 4 devices without increasing the individual work load and the number of quality errors.
The buttons and potentiometers have been replaced by the keyboard and screen
Prior to automation, the equipment was often handled with hard physical work, with parameter settings left to the employee’s responsibility; the "helmsman" was a position of outstanding prestige.
The question of moving to computer control was who among the staff and how quickly accept that the system is in control of the process, and they become “merely” service personnel.
Innovation to maintain cycle times
The supplier has faced the fact that while 3 years ago it was enough to put a manufacturer identification label on the product, now 7 smart devices have to be affixed to it.
The number of quality control points has also increased with this.
No price increase could be achieved for the extra work, so more operations had to be completed within the original cycle time of three years ago.
Digitalization of services provided - Switching from selling a boxed product to selling cloud-based services
The question of the transformation was which of the 70 salespeople has the potential to successfully sell solutions that are still in the design stage, requiring high knowledge, long negotiations, instead of selling tangible box products quickly.
The distribution of our projects related to digital transformation since 1989
(% of cases)
Change in number of assets attended due to automation
Changing manual controls to digital
Innovative solutions due to product digitalization
Digitalization of services provided
To do the same thing differently
Besides the simple rules like learning was most effective when the parameter data appeared on the screen according to the original layout of the traditional instruments, but we made motion studies and for two weeks, we analyzed staff fatigue curves by making three measures per shift.
With these rules and analyzes, we have not only facilitated the transition for employees (ideal order and length of work breaks, shifts) but also identified which elements of the process or control should be automated to ensure the expected cost reduction.
New methods within the old framework
Maintaining cycle time required flexibility, creativity, and a free division of labor in the work group.
We encouraged it by changing the daily production planning; while for mass-produced products it was still planned to produce the number of pieces per hour, for these individual pieces the required number of pieces had to be produced within the total time planned to produce the batch.
Besides ensuring cost-effectiveness (while maintaining the original cycle time) the groups have been developed
Best Practices that have also increased the efficiency of mass production.
Doing different, new things
The success of the transition from mass sales to individual sales depended on shifting work and incentive focuses at the same time.
Salespeople had to learn to negotiate the terms of the contracts, i.e., the steps to implement the project, and much less to present the advantages or disadvantages of the service. It had to be accepted that the monthly bonuses would be replaced by half-yearly, annual bonuses due to the length of the sales period.
In addition, the transition was successful for those who accepted that their individual outstanding successes could only be reproduced in close collaboration with sales support.
Underlying the digital transformation in all three models was a change in market demand.
Change in this issue is not a decision of the management, but a matter of gaining and maintaining a competitive advantage.
The success of change does not depend on employees, but on how well the management prepares and manages the change in work style, workload, and related incentives.
Don’t miss the human factor
Create a win-win situation.
MAKE QUALITY AFFORDABLE
In 1 month, we reduced the number of rejects by 45% by internally selecting only staff with proven accuracy for quality assurance positions.
The cost of poor quality is always paid by the company.
Sometimes at the price of closing the company.
From subcontractors to a new quality assurance department with 100 operators
The 100% inspection introduced due to customer complaints did not bring the solution.
The buyer returned entire batches in such quantities due to the scrap found in some boxes that the company subcontracted a scrap sorting service.
One month later, the number of subcontracted hours increased to such an extent that the temporary staff was contracted by the company - an entire organizational unit was built on the errors.
All or nothing
In June 2021, the active ingredients of two vaccines were mixed, and as a result, production continued in two separate factories instead of one facility.
We witnessed - in calmer market conditions - that a single quality defect in a factory led to the closure of the plant.
Whose KPI is the scrap?
During a regular day-to-day management walk at a company, the shift manager was asked to account for the cost of scrap%.
The cost report was usually completed three months later, and the shift manager was unable to provide a satisfactory answer to the questions about the causes - this was oil to the fire of the existing constant tension between quality assurance and production.
Distribution of the reasons for our involvement in development projects.
(% of cases)
Internal quality audit
Management System audit
Preventive error handling – so that everyone could find the same difference
In jobs, critical to quality consider the length of sustainable attention in work organization and the frequency of breaks.
Stabilize all the factors that help to identify defects - light, angle of inclination (for surface defects), sizing.
Use color codes and shapes to make matches visible.
Make to register the checked points.
And finally, look for individual working style coworkers whose accuracy dominates over speed.
Built-in control levels - everyone controls only the parameter whose effect they know
Sharing parameter control between jobs or on the help chain prevents multiple parameters from being set at once, making it easier to identify root causes and thus prevent errors.
Error-sensitivity - after how many defective pieces are the defect detected
In relation to the scrap% cost indicator; the employee works with high-value as well as low-value pieces in the same way.
For the high-value piece, the scrap% cost is always higher.
Employees have no influence on the value of the piece they work with, but they do have influence, after how many finished pieces in a row they detect to first defective.
If this performance indicator is used as one of the incentives, rapid improvement can be achieved. In addition, this KPI also triggers immediate review, as it is not possible to determine its value without it.
With this, even the sorting takes place in time and in-house.
Stable conditions for detecting discrepancies, process and product control, and incentives together lead to a reduction in the cost of poor quality and increased customer satisfaction, and thus long-term customer retention.
Don’t lose money or a client
because of poor quality.
Select the most precise people for quality so that you don’t have to sort the scrap.
RECREATE YOUR CULTURE OF SUCCESS
In 2.5 months, out of 1000 applicants, we selected 300 people who represented the founders' culture to both internal and external customers from the moment they started working.
The goal of expansion is either to reach new markets or to get closer to existing markets.
Whichever the goal is, customers expect the new location to represent the same level of service as the parent company from the first moment.
In our projects related to the new locations, we encountered three types of business cases:
The company, which already had several locations worldwide, has recruited an international management team to ramp up the operations of the location on the new continent in the shortest possible time, modeling the success culture of their parent companies.
The first year's task was to launch and stabilize the operations, and the task of the second and third years was to establish and stabilize local management.
The succession process was not a success.
They have lost two HR managers and three CEOs hired from outside the company in the third year.
Hiring the best candidates did not resolve the problem of the lack of continuity of the best leadership practices.
2. By the time the new maintenance and technicians were hired by the new location, all the equipment was ready to turnkey. In the absence of the translation of the operating instructions, these specialists relied on their previous experience in starting, operating and setting up the machines.
The situation was as if it were a 3D blueprint of a factory - everything was in place, but it still didn’t work.
This situation was worsened by hiring the operators; faulty machines were kept alive with temporary solutions; production was fluctuating, and the number of scrap was high.
Lack of knowledge "ate" performance.
3. At the end of the three-month selection process with the participation of nearly 900 applicants, a representative of the parent company congratulated us; the point was, that the behavior, values, and priorities of the newly hired employees represented the classic corporate culture created by the founders, which, to his great regret, is eroding by the mass opening of locations.
Distribution of our projects that supported a smooth expansion
(% of projects)
Sharing best selection practices
Leadership transfer – succession
Knowledge sharing system
Leveling locations' performance
In our case, the problem was not in the CEO’s selection or incorporation methods, but in identifying the critical position for the succession.
Filling the CEO position with candidates from outside the company reflected the belief that all employees are in the right position, including second-line executives.
Their displacement would have jeopardized the stability of the operation.
The solution, however, was internal - the former chief operating officer was appointed.
The COO position was easy to fill from the external job market.
The “incorporation” of the new operational leader into the culture strengthened the CEO’s position and also conveyed to second-and third-line executives the message that there is a future for their career at the company.
We have developed a dynamic, constantly updated „living” knowledge-sharing system to reduce the knowledge gap.
Experienced maintainers, technologists and operators of the locations involved in knowledge sharing have continuously uploaded solutions.
The advantage of the system was that the solutions were added to the system according to the frequency of failures - the new location thus received a ready-made recipe for repairing the most common failures.
The other advantage was that it was based on the symptoms of the failures, on what the operator would notice (sound, noise, oil leak, jam, etc.).
The third advantage is the built-in help chain - it included not only the solutions, but also the position of the problem solver.
Thus, it was clear when to involve a technician or engineer.
The knowledge base reduced downtime in the new location by 70% in 3 months.
According to our investigation conducted at three companies for a year, 80-85% of the job tasks and situations are successfully solved by anyone with the appropriate education and experience.
Only ~ 15-20% of job tasks and situations to be managed are critical for success.
The efficiency of the selection was made effective by simulating these situations. It was not the competency or personality profiles of successful employees that we "copied", but their solutions that were critical to success.
Expansion issues reinforced the applicability of our performance management findings.
The coordination and stability of technological processes are enough for the new location to play its intended role in the supply chain.
If the company manages knowledge and culture and its sharing, the new location will increase its own market and competitive advantages.
Save the time and the cost
of recreating your success-culture with our simple techniques and expertise to maintain or increase your competitive advantage on the market.
Psyon can help you with your most difficult problem, so set us a challenge and we will commit to improving your results together in a realistic time period.
Our services are not limited to geographical areas – with the help of our multilingual platform we offer a broad range of diagnostic and decision-making tools.
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