First, Sam must establish standards, or a set of ‘requirements’ for his business. Sam is working on the first step, establishing standards to measure performance. Sam wants to make $100,000 more this year that he did last year so he can replace older equipment In the repair shop.
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Raising the price of repairs can do this. This is a financial goal. It is important not to take customers for granted. A goal to increase customer satisfaction from 84% last year to 90% this year Is set. Customer service satisfaction must Increase by six percent this year. This Is a customer service-related goal.
Sam sets a goal to increase the quota, or a goal set for production, for the amount of cars each mechanic must repair each week. This is a production goal. With all of the new goals Sam set for the repair shop over the past week. Employees may not be able to keep up with the workload. To ensure the goals are met, Sam must devise a way to measure the productivity and performance of his employees. This measurement is compared with the goals he set above, or the preset standards. Once he evaluates the information, Sam can provide feedback to each employee.
This will help them make Improvements to their work. This is an employee performance appraisal. Sam developed the standards for what he would Like to accomplish in the above step. Now, he needs to develop a way of determining whether the goals are being met. 1 OFF yester and an employee evaluation system. Sam is working on the second step, measuring actual performance. Sam will present the new pricing guide to employees. He explains his plan for raising much-needed revenue to each employee so the employee understands the reason for the price increase. It is important to include employees in setting goals.
If Cam’s employees understand the reason for the price increase, they will be more likely to buy-in to the goal. Sam also introduces the customer satisfaction survey to his customers. Each customer will fill out a survey where they will rate their experience based on many factors like: Timeliness of pairs Quality of work Price Friendliness of mechanics Ease of payment Sam also has to develop a way to measure how many cars are being repaired by each mechanic on a weekly basis to be sure that the amount of repairs done weekly, monthly and in a year add up to the desired goal of increasing revenue by $100,000 set forth above.
He introduces the mechanics to a repair quota system. Each mechanic must fix ten engines, patch five tires and replace 15 windshield wipers each week. That means that each mechanic must bring in about $280. 00 in revenue each week to reach the goal. Once broken down for the mechanics, the goal is legalistic and attainable. The toughest challenge for Sam will be to introduce the employee appraisal system. He uses a system that involves the employee setting goals for themselves and Sam setting goals for the employees.
After chatting with each employee, Sam is able to determine the criteria for acceptable performance. He will include the sales quota system from above, dependability, reliability, motivation and absenteeism in the appraisal. He will sit down with each employee to explain the process. If employees have input in setting goals for themselves, they are much more likely to achieve the goals. Perhaps the salespeople are not making as many client calls as they did last year.