In class, we discussed the issue with the foremen at the Lima Plant. In manufacturing, your output is usually fixed. Let's say Machine A can deliver 1000 units/hour. After an 8-hour shift, you should have around 8000 units. It is difficult to push this number higher because extra work on the machine might cause it to burn out, thus losing production time.
With that being said, how should sales forecasts be viewed? If the sales team is having difficulty meeting their forecast, is that because leaders set the goals too high or is it because the sales team is not working hard enough. I work in a sales corporation and forecasts are higher than usual, and the sales team is falling behind. As the team falls farther behind, you begin to see motivation dwindle.
If the goals are set just right, you work hard to meet those goals and you feel satisfied when you do. When goals are set too far above the mark, you tend to lose motivation. The tricky part is finding out where your organization stands and I’m paying close attention to our sales team to see which direction we’re headed.
Forecasts are helpful tools that aid in decision making. Shouldn't the goal as employees, and for our employees be maximizing their performance without setting limitations? Yes forecasting could be a way to decide on a possible level of optimal performance, but it could also be demotivating, for example if everything ran perfectly smooth and any estimated down time was not actually lost, I may be able to produce eight more xbox360 units but my forecasted demand only said one hundred so i will take my time and just get the one hundred done instead of pushing it and getting 108 units. A team environment with organization wide goals and team evaluation rather than personal competition can create an organizational culture where optimal performance means everyone gets a bonus and has incentive to produce as much as possible.
ReplyDeleteI do not envy anyone that is in sales. I am on the other end in a sales organization. I support the sales team technology and provide analytical data to help them be more productive.
ReplyDeleteOne thing I noticed at my place of employment regarding forecasts. There are 3 numbers for one team. 1) The Sales Managers target 2) The Sales Leader target 3) The sales reps target. There have been numerous months where the sales maanger hits his/her targeted forecast, but the rest of the team doesn't hit theirs. I questioned this as the Sales Manager was always over 100%, but his team never hit their targets. So, guess who gets the bonus? Only the sales manager. How does that sales forecast sit with the team? If I was a sales rep I would be highly upset to see management making all the money and me being left to struggle to hit a number that is unattainable.
Recently at work our productivity level drastically increased because we reached our 3 year mark. What this means is that our HQ now assumes that our employees are more experienced and productive at work and are able to achieve a higher sales per hour percentage. So, the amount of payroll hours we were allocated this month drastically decreased. It seems as if HQ has arbitrally determined our productivity without looking at external factors. For instance, we have recently changed 3 of 5 executive team leaders, several team leaders and many, many team members due to performance issues or career changes. Therefore, our productivity level has probably decreased.
ReplyDeleteI believe that goals should be set slightly higher than previous years, but also that these goals and forecasts should include varying degrees of external factors; whether its the situation of the economy, new stores in the area, or the turnover of employees.
We base our forecasts on previous sales, market trends and potential sales forecasted based on client portfolios. Unfortunately, our goal setting methodology changes EVERY YEAR. We have new formulas and new reasons why goals are out of wack and not aligned for our sales teams to even meet the goals.
ReplyDeleteThe team loses motivation and morale sinks. The really good people leave and not so great people are stuck trying to manage several markets. It is a disaster year over year, but they continue to allow people to set the goals, when they have no experience in the field or understand how the job is structured. The goals are so far out, that the client is now extremely frustrated. ugh
Luke, I think, just from this very brief post, that what might help your company is greater inter-departmental communication. If your sales are at levels that are impossible to meet, either for you or for the manufacturing aspects, perhaps some sort of dialogue between sales and manufacturing would be helpful to make sure that promises that can not be kept are being made.
ReplyDeleteIn terms of sales forecasts, what are the reasons your forecasts are so high? Is there a way to figure out who decided these numbers and their logic behind the numbers they came up with? It seems like it would be hard to keep motivation up as well, as you fall farther and farther behind. My department here at KU is judged on state criteria, and as we approach the deadline, there is a crunch to meet some of these numbers, and it can lead to a rather hectic and tense atmosphere.
In sales it is sometimes hard to meet expectations/forecast that are developed by management. In many cases many internal and external situations are not taking into account that would greatly effect the production levels. This causes alot of stress on the sales team and sales leaders. In the case of Treadway Tire Planthe supervisors and managers were putting their foremen down and blaming them for not taking control of their staff in order to meet the production levels. The lack of communication and pre-planning of machine hours put strain on the foremen, and was bad judgement by the supervisors and managers.
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