Evaluating efficiencies created by your team can be one of the most difficult areas to evaluate. Unless the efficiencies can be linked directly to a cost savings, it can be hard to put a value on the benefit that those efficiencies created. Here are a few quick tips on things that will help you determine when and how much efficiencies have created value.
- Have your team document in detail the changes made including a list of the benefits created. These benefits include the direct monetary benefits such as reduction of costs, less overtime pay for hourly employees, and non-monetary benefits such as quicker completion time for processes, less overtime for salary employees (better work-life balance), quicker output times, ect.
- As a manager, be directly involved in the changes so that you know the full impact of how the changes are affecting not only your team but also how it is affecting other parts of your organization or parties of interest. You want to make sure the change is going to be efficient for all parties involved not just for your team.
How much value you perceive a non-monetary efficiency created is going to be quite arbitrary in most cases, so just do your best when creating a value system and keep it consistent. Look for possible direct results that you can use as a baseline. One way I have seen this done is in a corporate accounting department. Corporate accounting is rarely seen as a place for creating savings. It is usually just seen as an overhead cost that can not derive any positive impacts on income, however, by creating efficiencies a corporate accounting department can create a positive financial impact by being able to report earning faster and more accurately than before, which can directly affect investor perceptions of how the company is doing and thus can lead to a boost in stock prices.
It is also important that your team be aware that you need to be kept up to date on the efficiencies they have created. If you don’t know that efficiencies are occuring, it would be very difficult to assess employee improvements come employee evaluation time. This will also help you to be able to catch possible negative impacts that some effciencies can create for other interested parties before they happen.
Being aware that efficiencies are being created is the first step to being able to evaluate impacts of these efficiencies. So stay involved with your teams and you will be well on your way to creating a fantastically efficient team!
If you have any questions, comments, or suggestions of topics that you would like me to discuss in the future, please use the comment section below!