PRODUCTIVITY: JAMAICAN CHALLENGES AND POSSIBILITIES

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Presented at HRMAJ Convention 2009

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By

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Dr. Trevor Hamilton

Tel: 978-5070/ 6518

Email: thaconsults@cwjamaica.com

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November 25, 2009

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Productivity is not a complexed formula. It is:

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• The depth of transformation of resources.
• Employee satisfaction.
• Customer/ public satisfaction.
• Operational effectiveness and sustainability.
• Competitiveness
• Profit optimization

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“Buy Jamaica” is a “joke” strategy because:

It has no clearly defined or divisible customer value proposition.

• There are no more political or emotional protection.
• The nationality of companies is very fuzzy these days.
• Most goods/ services in Jamaica may have parts/ components coming from up to 6 countries.
• No correlation with customer satisfaction/ affordability.

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The typical productivity model comprises:

• The longevity of the service/ product life cycle.
• The distinctive value added.
• The process used to prolong the lifecycle.
• The talent capacity of the Team.
• The extent to which the right things are being measured- The Performance Metrics
• The use of information
• The general operating environment.

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• Paying a % of pay scale for merit increase and moving persons in the scale is life payment.
• Paying a percentage of profit.
• Paying a % of cost reduction.
• Productivity gains sharing.
• Job evaluation and classification.
• Selecting market percentile.

Productivity pay schemes that are not sustainable :

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For a productivity payment scheme to be sustainable, it has to be output and talent creation oriented.

Agreed

Outcome

Performance

Measurement

Performance

Results

Performance

Rating

Contribution

Pay

Agreed CompetenceExp.

Competence

Defined

Evidence of Competence Achieved

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Productivity programs must satisfy these:

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• Use talent to maximize proprietary value.
• Rationalize resources used to meeting customers hierarchy of value.
• Finding which 20% of activities generate 80% of customer value and concentrate corporate advantages in these.
• Putting your $ where your customer is prepared to spend.
• Significant variable pay components.

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Conventional business strategies focus on growth, market share and cost. Progressive firms focus on productivity, value, and customers:

Conventional Focus Unconventional Focus

1. Growing itself.
2. Product features and benefits.
3. Priced based on cost/ competition.
4. Attaining largest share of market.
5. Organize around basic process.
6. High fixation pay structure

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1. Growing its customer.
2. Product contribution to customers profit and hierarchy of needs.
3. Price based on profit it adds to customers bottom line/ fulfillment of needs hierarchy.
4. Strategic alliances to market complimentary services, products.
5. Organize around market.
6. High variable pay structure.

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The Process For Using Corporate Talents To Create High Return And Hard To Imitate Productivity.

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These are some personal talents that are used to create proprietary/ high productivity values:

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Instill a believable spirit of service through leading talent team. Fine examples:

Andrew Holness- JLP

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Oprah- HARPO Studio

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Butch Stewart- Sandals

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Mark Golding- PNP

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Dwayne Bravo- W.I Cricket

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Cliff Hughes-

NNN

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Purpose- your talent is your gift, your gift is your brand which enables your company to fulfill its vision. Eg:

“To organize the world’s information and make it universally accessible.”

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“To provide nutritious food products of superior value”

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Differentiate- No two talents are the same. So use your talents to differentiate to dominate the market.

• Differentiate means unique benefits to the market.
• Differentiate means difficult to imitate.
• The product/ service must: solve a problem, get rid of a

pain, bring pleasure, offer emotional pay off.

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Organizations become extinct because they are not distinct, or do not have distinctive talents.

Transform your employees’ talent to:

• Noticeable products/ services.
• Memorable products or services.

The ultimate driving machine.

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Caribbean Beer.

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Offer your talent/ brand to the right people segmentation.

• It will win the battle for recognition.
• It will have many takers.

Is for people interested in safety.

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Is for business travelers.

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Is for Jamaican fast food lovers who want to be traditional

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Your organization must have an operational DNA that makes the brand offering truly unique, credible and believable. Eg:

DNA/ PROCESS

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Coffee beans+ Water+ Fellowship

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Caramel+ Water (secret formula)

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Technology and Committed Staff

UNIQUENESS

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Unique coffee experience.

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Unmatched taste.

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Deliver packages overnight

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Talent is about mastery of competencies- Use your talents to create the “wow” effect/ mastery in the service/ product.

If an erection lost for more than 4 hours see your Doctor.

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You get stimulation of the body and mind.

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The Talent Management Framework

• New role
• Promotion
• Secondment

Development Plan

Interventions

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• Transfers
• Monitoring
• Job enrichment
• Seminars

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Talent Profile and Achieve- ments

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Home Grown

Vacancy

External Sources

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Induction

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Succession Plan

Participatory Review of Potentials

Participatory Review of Performance

RESOURCING

TALENT MANAGEMENT

TALENT DEVELOPMENT

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The National Environment For Productivity Must Be Favorable.

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Productivity, prosperity and economic competitiveness (PPEC) is:

(f) HCLR+HTR+CI+HPPP+PISS+LGB+LSD+CTU

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Meanings

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HCLR High capital: labor ratio

HRTR High H.R. talent ratio and regime

CI Culture for innovation

HPPP High propensity to pay for performance

PISS Public investment in strategic specialized knowledge

LGB Low government bureaucracy

LSD Low exposure to social disorder

CTU Cooperative trade unions

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The national productivity comparative analysis of readiness.

Success Factors

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• High capital: labor ratio
• High H.R. talent ratio regime
• Culture for innovation
• Low exposure to social disorder
• Low Govt. bureaucracy
• High propensity to pay for performance/ talent and competence
• Partnering trade unions
• Public investment in strategic specialized knowledge.

Rating in Open Jamaican Economy

Rating in the Jamaican Free zone

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• The Government of Jamaica knows that it can’t meet the formula so it creates the “free zone” to attract FDI the same way Caribbean Governments created free movement for 3-months to make World Cup Cricket viable.

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• Now let’s do an exercise on these factors as they apply in the Jamaican situation.

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The fact that productivity is higher in the freezone e.g: “Gated or enclaved operations are becoming the norm for creating high values/ productivity” e.g.

• Gated housing communities.
• All inclusive hotels
• Commercial freezones
• W.I. World Cup Cricket- Single zone immigration.
• Emerging freezone knowledge village.
• Even some political constituencies are enclaves.

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Jamaica’s imperatives for competitive productivity:

• Higher capital: labor ratio.
• Efficient government.
• Productivity oriented pay culture.
• Innovative job classification system.
• Increasing returns on talent/ strategic skills.
• A civil/ low crime society.
• Talent assessment oriented education and staff development system.
• Reward oriented pay system.

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Test these employer practices:

Requirements for Status in JA Productivity Culture

• Basic/ variable wage mix
• Training included in wage bill.
• Productivity index for market wage comparators.
• Wellness budget for the wage bill.
• Competency assessment instead of academic qualifications.

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MYTHS

• They are paternalistic with high propensity for lower productivity and income widening gaps.

REALITY

• Jamaican Social Contracts are growth oriented

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• Low k: labor ratio
• Wage freeze to keep all jobs
• Pay for passage of time
• No talent honing plan
• Lower productivity

• Job evaluation/ classification with market driven pay structure.

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• Job evaluation/ classification is equity without provisions for:

• Talent/ competency
• Productivity
• Performance
• Not sustainable in competitive environment.
• It is an old measurement of contribution

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MYTHS

REALITY

• Performance/ merit pay add on to base rate.

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• Market driven pay alignment among comparable employers is justifiable.

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• It commits to paying for merit for the life of the employee in the job. Its even computed in the pension.

• Comparative productivity is excluded.

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We have a lot of catching up to do to realize the imperatives when we examine the present realities.

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IMPERATIVES

REALITIES

1. High capital: labor ration

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2. Efficient Government

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3. Innovative Job Classification Systems

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4. Productivity Oriented Pay System

• Large central govt. deficit.
• Major disinvestments in the economy.

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• Crime is #1 problem but <1% of those apprehended get convicted.

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• Continued importation of conventional system that failed in USA through franchised consulting firms.

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• <5% of firm have variable pay.

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IMPERATIVES

REALITIES

5. Increasing Return on Talent & Strategic Skills.

6. Low Crime Rate

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7. Talent/ Competency School Performance System

8. Reward System Based on Performance

• Not included in job classification system.
• Not included in pay system.

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• <1% of apprehended cases get convicted.

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• Text recital exam system.

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• <5% of payroll have reward component.
• Jamaican government will be elected from consultancies that are strangers to prosperity and economic growth for the next 20 years.

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Yes we have a lot of catching up to do but let’s start today.

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THANK YOU!

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