Performance Based Pay
Innovation overview and development
An overview of the digital innovation
Recognising the challenge of trying to recruit and retain good people, particularly in the current market, Errigal have decide to use innovative technology to transform how we can engage with, motivate, and reward our tradespeople. Our biggest innovation has been to take a fundamentally different approach to wearable technology than the one used by companies like Amazon with their warehouse tracking technology and 3-strikes-and-you’re-out performance reviews. Instead of using the technology like a big stick, we have instead created positive motivations to recognise our hard-working tradespeople and the value that they add to our builds.
Using Mafic’s wearable FAIRPAY devices which can recognise what activities the wearer is performing from the movement of their head to a very high level of accuracy, the system gives the user a productivity score for the day, and gives them indicators for where they can improve – a bit like a construction version of a Fitbit, but much more accurate.
When we first started using this technology we realised that the top 1/3rd of our workforce was delivering 3x more earned value than the bottom third, so we wanted to find a way to recognise our top performers, and motivate and encourage everyone to up their game. Now, with FAIRPAY, individuals can understand if they’ve had a good or bad day, and why. On top of this we introduced a performance-pay scheme that gives everyone the chance to earn up to 10% more based on a combination of individual and team performance. We have designed the system to not just reward the best people but to give everyone a chance to earn more money.
We have found that this has massively improved both engagement and productivity – on average people are 10-15% more efficient – and everyone gets feedback on how they are performing, and is interested in their numbers. While a lot of tradespeople were initially sceptical about what we were going to do with the technology, by giving them control of their data (Errigal can only see anonymous and aggregated data) and giving them a share of the benefits, we’ve built something that tradespeople want to wear generating a win-win for both Errigal and the people who work for us.
The anonymised and aggregated data from the system now gives us powerful management information. We can see productivity trends which give us an early warning of problems, and, importantly, understand where time is being lost to things like time spent away from the workface. We can now compare these measures between sites, and challenge supervisors with team leader boards. By analysing how quickly people get tired over the workday, we have been able to optimise our shift patterns to reduce fatigue – a change that has given us another 6-8% improvement in productivity!
We are now rolling out Mafic’s technology across our sites, and will continuing to develop more functionality based on the platform – from Health and Safety features like slip, trip and fall detection, and HAVS measuring and reporting, to developing how we integrate it into our training programmes.
How the digital innovation was developed, including effective collaboration, knowledge transfer and partnership along the project team
This innovation has developed in conjunction with Mafic, who built the technology and have customised the machine learning that powers it to recognise that activities and tasks that are relevant to Errigal’s projects.
It has been a highly iterative process involving tradespeople and supervisors all the way up to project directors, and we have been on a journey that has developed and tested different features and functionality. When we first started this project, we did not expect to find so much value hidden in workforce motivation, but by constantly challenging what we were going and how we were doing it, we have developed something that takes a truly innovative approach to the age-old problem of motivation, solving the problem in a way that we are really proud of.
Details on the measurable commercial results
The large variation between best and worst performers means that the economics from this project are a no-brainer – combining the savings from bonus and shift patterns, we see a 20% productivity improvement. After costs and bonus payments, that equates to a 15% reduction in labour spend to deliver the same output. In other words – we are saving cost by paying our staff more money!
In addition our workforce is happier, and because we can really recognise and reward our top performers, we are starting to see some benefits from improved retention.
“After we started paying the bonus, morale, energy and productivity on site were all much higher”
SITE DIRECTOR
How does this innovation improve processes
In addition to the improved motivation, the information generated by FAIRPAY lets us better manage how our processes on site are performing. By allowing us to compare performance between different teams we can identify good practice, and trends and breakdowns allow us to spot when there are problems with things like material flow quickly because we can see changes in the time that tradespeople are spending away from their workfaces. We can use things like access time measures and trends to demonstrate to main contractors when there are issues and what impact they’re having with things like queues for the hoists.
We have seen a huge change in operatives’ attitude on site. They are now challenging our supervisors to ensure each workspace is ready and fully stacked with material so they can produce maximum output in the day. This has been a refreshing change as in past it is seen that supervisors are driving the guys to hit targets and work harder, now both sides are collaborating to achieve better output.
How might this innovation influence the specification
Over time we will build up a dataset about productivity from our projects that will allow us to better evaluate performance on different builds with different specifications and technologies – allowing us to compare their benefits in a quantified way and recognise best practice. We also expect to be able to analyse things like learning curves and the difference in productivity as builds progress up to higher floors.
Creation of novel internal systems to produce eco-innovation
While this innovation was not aimed at carbon or waste reduction, because we have increased our productivity, this would let us reduce the manning and duration of our projects, with the knock on benefits associated with lower energy, office, and other prelims, as well as fewer man days and less travel associated with them. While these improvements are small relative to embodied carbon, the cost of this carbon reduction to us is negative – we are saving carbon by saving money.