Effort and Reward

In Public sector, UK productivity, Uncategorized on April 14, 2011 by Tim Aikens

As I watch a TV programme about some third world country, I am often taken aback by how much effort some people are prepared to put in for very little reward.  You see very upsetting scenes of children and adults spending all day scouring a rubbish dump either for food or some scrap metal that they can sell.  It is subsistence work.  A huge amount of effort for barely enough reward to live off.  In these countries it is a sad fact of life and one that is often hard to change.

Move west to an industrialised nation and here you have people working equally hard and some making millions od pounds a year.  This is often enough to feed scores of people! However, what goes unnoticed in many organisations is a vast amount of effort for very little reward.  In many areas of business, be it manufacturing or service there are loads of folk working hard and generating little reward for their employer.  In the ‘Lean’ world of productivity these activities are referred to as non value adding.  This is something that is part of a business process or value chain that does little or nothing to add value.  For example take invoice approval.  It is very important to make sure that an invoice is correct, the goods or services to be paid for have been delivered and the contract has been complied with.  But how many people need to review and approve this?  If, say five signatures are needed , how much value does each one add? What is the reward to the business for three of the five signatures?  More for less is about removing all those activities that provide the business with little or no reward.  In re-engineering a process each activity should be challenged in terms of the reward it brings for the effort applied.  If the reward is too small either cut the activity out all together or find an alternative approach that involves less effort.

A simple principle but there is still far too much effort for little reward in both the public and private sectors.  Both sectors are making more and better use of the ‘business case’ – identifying the financial benefit of taking a particular course of action.  Perhaps there needs to be more business case analysis of effort that has little or in a lot of cases no reward.  This, of course, is one of the principles of the ‘Lean’ approach.  However, you do not need to be a Lean practitioner or a time and motion expert to ask the simple question – what is the reward for an activity and how much does the effort cost?  The biggest hurdle to jump is breaking out from the in built inertia of an existing process and challenging activities that may have been in place for years.

A couple of examples from the public sector in the UK.  The government has finally decided to look at national Insurance.  Income tax by another name, but something that requires a huge effort from tax payer and taxman alike for no extra reward than if the same sum of money were to be recovered through an increase in income tax.  The problem has always been historical inertia (and perhaps the idea that NI is not income tax, so like Mr Blair and co you can raise revenue without increasing tax?!).  The other great example is car tax – the ‘Roadfund Licence’.  Again lots of effort to collect and police this tax.  Why not bin it and increase the petrol tax. People then pay on usage (fairer) AND a vast amount of extra income would be gained AND a huge amount of police effort would be better spent.  Again, inertia seems to be the order of the day.

So get out there and start to challenge.  Where is my organisation getting minimal reward for lots of effort?


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