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Gold Stars Drive Productivity
In my hubs I have written about the benefits of the Friedman system to drive sales and customer service performance in an organisation. A key element of the Friedman system is the use of gold stars to measure performance.
The system is fairly easy to understand. It is based on the productivity results of a team member. In a basic system the staff member on a weekly basis would place a sticker onto the chart depending on their result for the week, this wraps into a monthly overall score and then a quarter by quarter overall result.
The scoring is:
· Don’t get target – a red dot
· Get target – a green diamond
· Get target by 10% or more – gold star
About 4 years ago I developed a modified Friedman system for my business that measured the sales result by each category and also the customer service score. This tool has enabled my business to get target most months, to effectively performance manage staff (even under Fair Work rules) and to grow my business. An example of the form follows.
I have always had a hunch that by displaying gold stars actually works for people at a physcological level and that staff generally want to do a good result and want to be recognised for it. It has definitely been demonstrated in my business through using this simple system.
Recently my hunch has been confirmed. Jordi Blanes i Vidal and Mareike Nossol of the London School of Economics recently published some work on how gold stars increase productivity based on research at a German Company.
At this organisation management started to inform it’s warehouse workers privately on their pay and performance rankings relative to each other. As a result the productivity increased by 6.8% on average. According to the researchers the practice suggests “that telling employees how they rate is unambiguously beneficial to profitability.” (Harvard Business Review, January – February 2013, p.24).
Interestingly the majority of workers found this information beneficial and positive for 51 out 58 employees. Only one found it to be demoralising (most likely the worse performer!)
So, if ranking staff, giving information about their results verses other staff and using gold stars works, then why aren’t more organisations using this system?
Once reason is that the organisation doesn’t want to challenge themselves or their staff. This complacency will not drive productivity and will lead to poor results.
The other reason is that managers lack the necessary knowledge, skills and experience to have challenging conversations and to implement the system. This suggests that organisations need to train managers and hold them accountable for their results.
In my business we all have Friedman sheets. From my role right down to the frontline we can all gold star, green diamond or red dot. So, we are all accountable for our performance.
The challenge for business today, in austere times, is how can we harness the power of gold stars to ensure that our businesses remain profitable and grow.