February 1998

Rewarding Organizational Goal Achievement

Over 40 percent of the Red River Army Depot's employees are members of chartered self-managed work teams. To support its team initiatives, the Depot designed an award program that emphasizes team and organizational performance and breaks away culture where awards were distributed almost solely based on performance ratings.

• Group Award Program
• Feedback
• Other Awards
• Lessons Learned
• For More Information

Group Award Program. The movement to using teams at the Depot was planned and implemented through partnership. One of the most innovative ideas generated by the union was the implementation of a group award program that bases award payouts on the Depot's overall organizational performance. The Depot has decided that the best instrument for determining how well it performs is the measure of its net operating results (NOR), which is the difference between the Depot's revenue and its expenses. Because this measure is used to determine payouts, the group award is called the NOR award.

The NOR award was initiated in fiscal year 1995. Each year under the NOR program, the Depot determines an annual target for NOR. Meeting or exceeding the NOR target triggers a group award for a specific amount. If Depot goals are achieved, the award is paid annually to all eligible employees as a special act award reflecting Depot performance - not individual performance. No individual performance awards or quality step increases are given. This shift to recognizing organizational rather than individual performance has helped focus the entire Depot on achieving bottom-line results.

Feedback. Feedback on the Depot's NOR performance is communicated to employees in a variety of ways:

• directors receive NOR feedback at monthly management meetings and pass it on to their employees;
• periodically, NOR feedback is provided in the Depot's internal newspaper;
• the Depot Commander will occasionally give NOR feedback in his weekly televised broadcast; and
• feedback is often given at all-hands meetings.

To be eligible for an award payout, employees must be in an approved work status. Employees receive a quarterly portion of the NOR award when they are in a work status more than 50 percent of the quarter (520 work hours are considered a quarter). Employees on sick leave, annual leave, leave without pay, suspension, etc., for more than 49% of a quarter will not receive the allotment for that quarter. Employees who depart the Depot during the fiscal year receive their quarterly allotment based upon these criteria.

Other Awards.

In addition, and not related to the NOR award, money is allocated to each self-managed team for on-the-spot and other team member awards. This budget is established as $100 per year per team member (up to $1,000) and awards are granted based on nominations by non-supervisory personnel of the team, with the team as a whole usually deciding how the award money is granted. Some teams divide the money evenly among team members; other teams give a greater percentage of the money to better performers on the team. Also, individual employees who perform special acts of a heroic nature can be recognized with an individual cash award, but it must be approved by the Commander of the Depot, the directors, and union partners.

Lessons Learned. The Depot has made two NOR award payouts - one in 1995, the other in 1997. Both payments came to $500 per employee. Some lessons learned about the program include:

• designing awards programs through partnership improves acceptance and increases their chance of success;
• the objectives should be a stretch, and if targets are not met, don't make payouts; and
• advertise the measurements and results to all members frequently and in a manner that they can relate to their performance.

For More Information. For more information about the Red River Army Depot's award program, you may contact Wayne Bloxom at 903-334-4575.