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A shop owner whose operation's sales had doubled over a three-year period was looking for outside help to advise him on how to regain the high quality and service levels his shop had delivered when it was smaller. During this growth period, he expanded the building and added new equipment and computer systems. To process the additional workloads, he nearly doubled his number of shop employees.

When describing his problems, the owner noted that this larger operation was becoming more and more difficult to manage. He felt that he was losing control of his business and that his shop's reputation for high-quality service was deteriorating. The answer, he thought, was better organization, the installation of new management software and the implementation of better procedures and policies.

After spending some time assessing the situation, I concluded that while new systems and processes might be the answer, his limited resources might be better spent on a more deeply rooted problem: His shop was experiencing severe growing pains due to people-based problems. The rapid increase in sales over the past three years had required a rapid increase in employees, and his shop now suffered from low employee morale, high overtime costs and high absentee rates. Key employees often worked 60 to 70 hours per week to process the heavy workloads and to keep up with fluctuating customer demand. More recently, employee turnover had become an issue, causing the owner to fall into a "warm-body hiring syndrome."

In this case, an argument could be made that new systems and procedures and better organization would be the first step to take. But my argument is that since people (employees) are needed to execute plans, operate equipment and service customers, why not consider them first or at least concurrently with the roll-out of new operational strategies?

I often hear an interesting contradiction from operators and managers regarding employees and shop problems. They readily acknowledge the value of their employees with statements like, "We couldn't do it without them" or "Employees are our most important asset." Great statements that I love to hear, by the way. But then I often find myself cringing when I hear the same people say:

• "Kids today have no values and aren't motivated."
• "There aren't any skilled people to hire."
• "Employees are only motivated by money."
• "Employees only care about themselves."
• "I have to keep repeating the same thing over and over again because they don't want to listen."

The frequency with which I hear these contradictory remarks has led me to believe that although operators and managers often realize the value of their employees, they're reluctant to invest in their "people capital." They often misunderstand people, assuming employees can be purchased like equipment and will perform as expected.

What's needed are more people plans - structured toward long-term operating strategies and sensitive to employee needs. Management has business plans, financial plans, marketing plans, maintenance plans, action plans, procedure manuals, and on and on. But where are the plans for our most valuable capital assets?

A people plan - outlining the best ways to acquire, deploy and maintain employees - needs to be an integral part of your shop's daily operations. Why? Because when properly motivated and directed, employees drive the processes that result in quality, innovation, efficiency and customer satisfaction.

Good People Are Hard to Find
Ask a senior manager of a successful consolidation group about their selection criteria for shop acquisition candidates, and he'll likely say that while they use many factors to identify the best shops, they're also purchasing people or, at the very least, a good management team.

And, as you surely know, good people are hard to find. The results of a recent shop survey published in "Auto Inc." listed finding good technicians as the overwhelming issue facing U.S. collision repair facilities. Another report, sponsored by AIA of Canada and based on a study of Canada's collision repair industry, noted that human resource challenges are the primary issues facing the Canadian industry. The study showed that high average employee age, lack of a training culture and limited employee career prospects are just some of the problems faced by employers.

What can be done? Three of the study's five primary recommendations were people based: Focus on recruitment and retention, entry-level education, and ongoing training and skills development.

Though these surveys indicate that management is aware of the people problems, there are still few plans available to attack them.

Putting a People Plan into Action
There are three components to a good people plan:

1. Staffing model
2. Hiring and training
3. Performance management

The plan basically identifies where to go with your people (staffing model), how to get there (recruiting and training) and how to manage and maintain them (performance management).

On a smaller scale, owners and managers are actually performing this type of planning every day. And it'snot rocket science. Consider the numerous plans and adjustments that are needed when a key or high-producing employee goes on vacation. You intuitively create a mental staffing model to assess what functions or tasks will be needed to continue operations. You also make job assessments for multiple positions since more than one person will assume different duties to cover for the key person's production output.

Let's look at the three components of a good people plan in more detail ...

1. Developing a Staffing Model
In the rapidly growing shop I discussed earlier, the owner had been hiring new people without giving proper attention to how job content and workload distributions were changing his employees' roles and responsibilities. New referral partners, vendors and suppliers also had caused a change in daily procedures and activities. To further complicate the situation, the owner had added new information and repair technology to help process the additional work - but this new technology had also created a need for more changes to job content and workload distributions.

When his shop was smaller, the owner and a few of his key employees could be depended on to fill in any gaps in the shop to cover for break downs, volume swings, vacations, absenteeism or simply to rush a job or alleviate a production bottleneck.

But during this evolution, the owner had been unable to keep up with all the new technology, tasks and processes now needed to run his operation. His shop had basically grown out from under him.

What he needed to do was develop a staffing model to help him anticipate his people needs before a problem occurred.

A staffing or target model illustrates both the current and future job positions needed to meet the company's operating objectives at different sales levels. Sales levels can be determined by using historical trends or targeted sales growth and objectives.

Each job position listed requires an associated job description or position profile that identifies the job content and distribution of activities and workloads to meet operational demands. The basic idea is for shop owners and managers to have a clear understanding of their employees' workloads. And without job descriptions, they tend to lose track of the numerous little things that their employees do - continuously heaping more tasks on their employees plates without giving them adequate training or time to complete the new tasks. So, as a consultant, I try to keep owners/managers acutely aware of these issues by telling them to create job descriptions for their staff.

For example:

Job Function - "Prepping cars for painting."

Job Title - "Paint Prepper."

Job Description/Job Duties (can be bulleted or in paragraph form) - "Quality check that body work meets shop standards, clean and protect vehicle, prime repaired panels, sand and block repaired panels, prepare blend panels, final clean and protect vehicle for paint, quality check paint preparation."

In this "paint prepper" example, shop owners typically forget that the prepper may also have to move cars into and out of the paint department. Owners also often forget that the prepper has no guidelines or authority to "kick back" jobs to the metal tech, who may have performed a bad metal repair that can't just be "painted over." Worse yet, the prepper may just re-repair the mistakes made by the bodyman (doing the bodyman's job). Regarding training, the prepper may not know how to organize and prioritize multiple cars and job types that need to be prepped throughout the day and subsequently painted to meet the delivery date demands of the customer and the shop.

The point is to understand all tasks and associated skill requirements needed to make the "Paint Prepper" meet company and customer objectives and also to give him the proper resources to be successful. High turnover and poor management will require a more detailed job description, while well-run shops only need loosely outlined job requirements because these owners have a good understanding of their business and probably have good management, communications and organization within their shops.

When compiled as a table or chart, a staffing model - complete with position descriptions and wage information - can be used to guide both short- and long-term decision making because it helps identify:

• Future staffing needs and budgets.
• Employee career path options.
• Cross-functional skill requirements.
• Back-up planning for all positions.
• Succession planning for key positions.
• Gaps in workload distribution and operating needs.
• Recruiting and hiring requirements and budgets.
• Training and development requirements and budgets.
• Multiple position levels (growth levels) within a single job description.

An example of multiple position levels: Metal techs are generally referred to as A, B or C level technicians. (A) journeyman or capable of everything including heavy unibody and mechanical; (B) mid-level or light unibody and light to complex panel straightening and all lower level tasks; (C) entry-level or basic skills tech with remove and replace and light straightening tasks.

Growth levels include "soft skill" capabilities and performance. Say, for example, that a metal tech has a "technical expert" job position where he's an expert in the functional task of car repairs (so he's held accountable for and paid a high rate for doing the best job of repairing cars). In this case, I'd expand the range of metal technician position levels to another level, such as "process champion," which is higher than the "expert" compensated metal tech level and requires that the metal technician also have a competency and responsibility for leading a team or identifying and planning training needs (and maybe executing them) for lower skilled metal techs.

Many of the job positions in a shop, even in the front office, should be viewed in this manner to facilitate greater growth of individuals, greater employee involvement in the system and more people working on the front lines who are responsible for overall organizational (people) development and business improvement.

Thus, if shop owners can look at all basic job functions and job descriptions in terms of all the different tasks or all the different shop needs and create structured employee development paths to fulfill and perform them, then employees would have more involvement and greater contribution toward overall company goals and objectives.

2. Hiring and Training
With few exceptions, hiring and training in this industry has generally been done by the seat of our pants (or by trial and error). But during the last two decades, autobody operations have been evolving from Mom-and-Pop shops to professionally managed and technology-supported business operations that seek out market share and competitive advantage. For this reason, it's no longer feasible to employ informal or unskilled methods to address people and performance issues.

People development has to be a planned series of tasks and assignments that grows a person up. It has to be long range, long term and highly defined.

Frontline management would make greater strides in improving operations if the majority of their performance measures were replaced with people development measures and accountabilities. In shops lacking a well-tuned employee development program, we repeatedly see motivated people who want to develop themselves eventually leave - leaving the shop with employees who don't respond to employee development programs.

This means that to effectively engage employees, everyone in a leadership position - managers, supervisors, team leaders and key individuals - needs to improve their "soft skills," such as leadership, training, coaching and feedback, conflict management, team building, listening and interpersonal skills.

Generally, employees don't have a built-in knowledge of the soft-skills needed to succeed in team systems and continuous-improvement operating cultures. For the 90 percent of people who don't have these inherent skills, they must be taught and trained.

But to learn effectively, a person has to be given the opportunity and the tools. A person also has to be motivated to adapt the newly learned skills to address everyday problems and activities.

Study after study tells us that good leadership and interpersonal skills, along with positive reinforcement and coaching, are important factors that improve employee motivation and performance. Even with the best-laid plans, systems, technology, processes and procedures, your operations will falter if your employees aren't properly motivated to perform.

There's an unwritten rule in the autobody industry that suggests we hire people based on their "hard skills" and technical experience - yet we terminate them for a lack of soft skills, such as ability to work in a team, misplaced emotions, inability to change or inconsiderate treatment of co-workers or customers.

But the costs associated with hiring new employees are very high. For hourly workers, I've come across estimated recruiting and processing costs between $300 and $5,000. For salaried people, estimated hiring costs are so high that they're typically based on a percentage or sometimes a multiple of the position's yearly wage rate. Costs are higher yet when lost production, sales and customer service are factored in. And how much more does it cost a shop when morale is low due to employee turnover or the hiring of the wrong person?

Proactively recruiting and hiring employees is a dreaded task and, most times, a source of considerable debate and aggravation. For these reasons, hiring and retention plans are most times non-existent or based solely on monetary incentives - when recruiting and hiring should be an ongoing process. Prospective candidates have to be sourced both internally and externally. Management has to "hire tough in order to manage easy." The recruiting and hiring processes have to be aligned with deliberate employee development systems and supported with active performance management systems.

Is recruiting balanced between your external and internal resources? Do existing staff members have a fair chance to apply for new positions? Is there an estimator or customer care rep lurking within the paint, metal or detail department? Are employees often thought as too old, too young, too rough around the edges to be considered a valid candidate for an upward or lateral move?

3. Performance Management
Many of today's hot management topics and new management initiatives involve benchmarking, continuous improvement, best practices, standardization, improving cycle time and throughput, using performance measurements and establishing individual accountabilities. Unfortunately, the frontline employees - those entrusted to execute, implement and use these initiatives - are held responsible if they fail and are rarely given recognition when they succeed. Managers clearly need better tools and processes for understanding and engaging employees in business operations.

In an effective performance management system, company goals are clearly defined, progress is tracked, feedback is provided regularly, performance is evaluated fairly and equitably, and career and development opportunities are available.

The keys to effective performance management are:

• Linking your people and their development to overall business objectives (planning, recruiting, hiring, training, compensation, feedback, rewards, recognition, career development, etc.). Make sure that your people are ready and able to execute the basic business plan or strategy of the company. If you want your shop to continue to get bigger, hire people who can grow (become more productive) and/or participate in training new employees. If you want your shop to be identified as the most progressive and professional shop in the area, hire people who are or can be developed into (with planned training) the most professional and courteous employees in the market. If you want your shop to be innovative and efficient, support those goals with systems, processes, motivational devices, training and hiring that will achieve those goals. Don't just hire "warm bodies" and not give them any support, and then two years down the line, scratch your head and say that your employees are "holding your shop back" from reaching its goals.

• Emphasizing and measuring employee development before financial or production measures.

- Define and establish clear performance goals.

- Track progress and give relevant feedback.

- Develop employees to meet or exceed company and personal goals.

Managers generally have a good understanding of how equipment works or how processes should be performed, but they understand little about why employees do or don't perform. But if managers spent more time helping employees develop their skills and attain a better picture of how each part of the operating system works, employees would be better equipped and more willing to discuss problems with co-workers and management and to address issues and generate solutions. Helping employees develop their skills also results in better work distribution and a lot of informal cross training.

Managers can deliver the greatest employee development through mentoring, assigning interesting projects and identifying improvement areas.

Make People Your Priority
Operators and managers have been investing heavily over the past two decades to acquire, learn and create the tools and strategies needed to advance operational capabilities - yet they've been ignoring the capital resources that make everything work: people. It's time to devote all process improvement efforts and capital investments to your people systems. After all, employees and managers are the only capital assets that improve over time and have a capability to create, innovate and share the knowledge needed to achieve continuous operational excellence.