Memo for Lafayette Region

1. The number of Working in Process raised slightly in May, as a result of the new 4-4 working arrangement. And the region started to make a profit since 2nd quarter, although it still far behind its budget, showing that the increase in production can leads to a profit raise. 2. Bill Newton partly solved the problem of dealers, provides Lafayette Region enough backlogs, however he did not begin to solve the main problems that Boise facing, and his initial endeavor of reform the supervisor from hour workers to managers proved to be of little help. But at least he already figures out where are the problems. 3. The main problems Newton facing is the poor management over his employees. Workers employed are just told to do some kind job, no company rules, no introduction to company situation and decisions, no explanation to any changes, workers can only guess what the company want, and this often results in a negative and hostile assumption toward company. Drug taking and stealing also happened as a result of poor management. Those management problems directly lead to a negative working attitude, thus low working efficiency, make the production delay, and finally result in a low profit. High turnover rate of Lafayette Region results in lack of experienced workers, and Lafayette Region also facing the problem of lack of communication. The absent of communication between leaders and employees makes workers do not know what company want, why some decisions are made. Communication among managers is also poor, each department just knows their own business but only know a few about others, and even Newton cannot get detailed information from his managers, he even need to hire some kind of agent to know what happened in his workers!

4. Newton needs to do lot things to make a different. First, Newton should improve the management over employees. The Lafayette Region has little such management before, what he needs to do are: A. Comes up with some method to increase communication with employees and increase transparency between hierarchies. For instance, morning or evening meetings. Use such methods to let employees know what is their manager is thinking, what problems their company facing, what methods are been developed and what should they do. Regular meeting among managers is also needed to let each department understand the company decisions and the problems each department facing. B. New payment methods should be established, the salary different between two skill levels is just one dollar per hour, such a different is too small to inspire employees to improve their skills, and the salary for skillful employees are not high enough to keep them working in Lafayette Region. The payment for fresh employees should be lower, widen the income gap among different skill-level workers, and increase the salary for skilled employees. Another reform is transform the old pay-on-hour method to pay-onqualified unit method, the more qualified house a worker builds, the more payment he gets. Independent quality control team should be established to make sure the quality of products is meeting the standard. If unqualified products are detected the house should be marked and kept in yard, rework on those houses will be on extra hours after work, not until the work is finished will the workers get the house counted on their income and start to working on new house next day. Second, detailed control on tools should be applied. A locked storage and a keeper are needed. Every tool should be numbered and kept in a locked keepers room, name of the worker who takes which tools should be noted every morning when work starts and who returns which tools should also be noted every night when work ends, any defect tools should be returned to keeper and loss of tools will be punished. Third, Newton needs a raw material cache. Material manager should prepare enough materials for two weeks or longer production needs in a locked keepers room. Any use of those materials should be registered and defect parts should be returned to keepers room. Because of the prices for materials are keep growing, buy them early can save part of expenses. In long term, Lafayette Region needs to put more attention on their corporate culture. A good corporate culture can attract valuable employees to choose Lafayette Region and stay, encourage employees to hold a positive attitude toward their job, obey the rules of the company and work actively. The turnover rate will also decrease, and a low turnover rate means longer time in job and thus more working experience. The construction of corporate culture is the key to the problem of employee management that Newton now facing. 5. Lesson learned.

Employee management is an important issue for companies. The right management method, for example, company rules, payment system, incentive system, can inspire employees to working with a positive and active attitude and combine their goal with the interest of the company. However in this case, Lafayette Region only has part of employee management methods, and even those methods are set improperly and hardly do anything good. Even Newton knows something wrong with workers, however he still put emphasis on improve productivity directly, so he adopted the 4-4 arrangement. Theoretically 4-4 working arrangement can increase the production by 1.7 times, however the actual result is just 1.4times. Most of the extra hours gained by 4-4 method were wasted by the workers, because of over tiredness. The result is, more cost input, but few profit raise.