Dairies are taking greater control of employee performance and succeeding at creating a culture of high performance that benefits both the business and the employees.
By Anthony P. Raimondo
Traditionally, dairies have operated using a labor model that places very little accountability on workers for quality of work, efficiency and productivity. Most dairies have never used any sort of performance standard to measure the success or failure of milkers, maternity workers, feeders and other employees.
In today’s difficult dairy economy, where slim profit margins and volatility are the norm, dairies cannot afford to ignore how accountability can lead to better performance of the business, and a better bottom line for the dairy producer.
There are a number of tools available to dairies that most are not using to evaluate the performance of the workforce. By using these tools, and putting standards in writing in an employee handbook, dairy producers can create a culture of high-performing employees and a better performing business.
Many dairies are using video cameras to monitor the dairy. A range of computer software applications can be used to monitor the milk barn and the handling of commodities in feed mixes. Milk quality test results are an important resource that is often forgotten. Veterinary data, such as calf serum results, are an important measure of the quality of care that calves receive. These tools can be used to improve performance in a number of key areas that affect the bottom line.
Safety: Enforcement of safety rules through discipline can positively impact the dairy’s bottom line by eliminating costs related to workers’ compensation claims. Reducing the number of claims will help reduce workers’ compensation insurance costs and reduce lost time to accidents. Monitoring workers on video for safety violations, as well as documented investigations of accidents and injuries, will help the dairy create a culture of safety that will protect employees from harm and improve profitability.
Milk Quality: All dairy producers understand the importance of high-quality milk, but most do not hold milkers accountable for milk quality until there is a catastrophic failure. Labor is a critical component of milk quality. Coliform problems are almost always labor problems. LPC problems are typically labor problems once equipment and water temperature are ruled out. SPC and SCC problems can arise when milkers fail to separate ill cows for treatment.
Quality is an area where dairy producers can use both a “carrot” and a “stick” to improve quality, which will improve the dairy’s bottom line through creamery quality bonus programs. Monitoring milk barn video and imposing discipline for failure to follow milking and sanitation procedures are usually the primary approaches, but other approaches can be effective as well.
For example, some dairies are implementing incentive pay systems that allow milkers to make more money when quality tests show that they are producing high-quality milk that brings a bonus to the dairy. Dairy policies should explicitly state that when there is a test result that falls below acceptable standards, all milkers who milked into the problem tank will face discipline and, if the problem continues, termination. This type of collective responsibility will drive milkers to police each other in the barn, and to push their co-workers to follow sanitation and milking procedures.
Efficiency and Productivity: Dairy producers now have technological tools to measure the efficiency and productivity of the milk barn. There should be published standards in place that create accountability for how fast the cows move through the barn during each shift. These standards should be realistic but achievable, and milkers should face discipline when they milk too slowly. Better efficiency leads to a better functioning dairy, and to a reduction in overtime and hourly wage costs.
Commodities: With the high prices and volatility that have become commonplace in the commodities markets, controlling waste in feed mixing is critical. Software programs can monitor feed ingredient loads to record how much of a particular ingredient was called for in a feed mix, and whether the employee who loaded the ingredient loaded too much or too little, and how far off of the target the load was. It is critical for dairies to set a limit on overage or underage of feed component loads. The feed mixes are designed by herd nutritionists to maximize herd production and health, and variations from the mix can negatively impact the herd. In addition, frequent overages result in the waste of expensive commodities, and must be controlled in order to address feed costs. The tolerance standards should be in writing and should be enforced through discipline.
Calf Health: Calf serum reports are a good measure of the performance of maternity workers, as are mortality rates for calves. Calf serum standards and mortality rate standards should be established in writing and should be enforced through discipline.
If the dairy is creative, objective performance standards can be used in a wide range of areas to improve employee performance. These standards can be used not only for disciplinary purposes to weed out poor performers, but to reward employees who perform well and consistently meet the standards.
Employees in all industries respond best to clearly stated expectations, and perform best when they are rewarded for success and held accountable for failure. More and more dairies are starting to take greater control of employee performance, and are having success at creating a culture of high performance that benefits both the business and the employees.
The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Anthony Raimondo at McCormick Barstow LLP in Fresno, at (559) 433-1300.