Linking Time & Performance The four activity groups used by international intangible standards (structural, leverage, knowledge, and collaboration) explain 100% of organizational time, and therefore the costs, revenues, and metrics related to that time. Absenteeism Related Time & Performance Impacts It’s well known that when employees “go on strike” and organization loses revenue due to lost productivity, and increases costs due to lost productive time. The connection between structural time components like industrial action, industrial accidents, sick leave, absenteeism, are well known and understood by all managers. This is due to the undeniable connection between time and money. Time is required to make money and time not used productively wastes money. Presenteeism Related Time & Performance Impacts Presenteeism impacts are less well known. Presenteeism is when employees are at work but actually “on strike” because they are stressed, disengaged, not working to a reasonable skill level, or are not using available technology, processes, or methods. Presenteeism is all about opportunity costs. Just as an employee cannot generate revenue when they are physically “on strike”, they cannot generate productivity when they are at work, but not working. The three remaining intangible standards groups quantify presenteeism – staff at work but not working. It does this by assessing presenteeism on a group–by–group basis. This can be more easily seen below: Assessing Actual ProductivityIt is essential to measure both presenteeism and absenteeism related impacts in order to determine true productive time. When performance improvement initiatives improve productivity they do so by reducing presenteeism and/or absenteeism related time. Intangible standards are the first end-to-end system for being capable of financially valuing productivity in this manner. The goal of international intangible standards is to create and value artificial employment®. This is best explained by reference to the diagram below: When total time is fixed, a reduction in disengagement (non-productive time) will result in an increase in engagement (productive time). Any time saving created in this manner is conceptually equivalent to hiring an experienced employee to do more work without paying them wages. Artificial employment is a way to increase your workforce without paying more wages by reducing employee disengagement (“on strike” actions due to absenteeism or presenteeism). Artificial employment is a powerful way to provide superior service, satisfaction, and productivity at a lower overall cost than rivals. Assessing Cost Effectiveness
Artificial employment therefore directly impacts cost effectiveness. Let’s assume a competitor gets $100 value from each $100 they spend on costs. Now let’s assume that you get $50 of value from each $100 you spend on costs (due to presenteeism and absenteeism related activities across the 4 intangible standards groups). You will need to spend twice as much as your competitor to have the same value effectiveness. If you received $25 value from each $100 you spend, then you would need to spend 4 times as much to get the same value. Cost effectiveness is one of the most significant issues within organizations today. International intangible standards are the first to be able to estimate cost effectiveness within an organization. Intangible standards use a five phase approach to achieve breakthrough performance improvements .
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