You get what you measure and it's no different with trade contractors. Performance measures should be designed so the trades can use it as a clear "voice of the customer" to communicate the few, but critical, aspects of performance. Keep in mind that limiting performance measurements to three or four key indicators will keep focus the important items.
Performance measures should rate construction concerns as well as the contractor's contribution to the company's customer focused strategic objectives. Involving the trade contractors in developing these measures will assure their support. Some measures to consider are:
- customer satisfaction ratings.
- schedule performance.
- workmanship and number of defects found during construction.
- call-back frequency and cost.
- cycle time reductions.
- continuous improvement suggestions, number of improvements, best improvements of the month/year.
Triple Crown, Harrisburg, PA, a small volume National Housing Quality Award winner asks customers to rate the performance of the electrical contractor's work. Customers rate their satisfaction with workmanship, the number of outlets, the placement of outlets and light switches, and satisfaction with the courtesy and responsiveness of service calls. All key contractors get similar feedback on the performance of their trade from the home owners they service.
It may be useful to formulate a quality performance index that consolidates several indicators into one comprehensive quality performance measure.
Shea Homes, San Diego a 1996 NHQ winner started monthly contractor report cards to improve overall performance. Ratings are posted in the construction trailers. Wes Poplewell, V.P. Operations says "They all want a perfect report card, if there's a low score ... they want to discuss it". When trades respond to measurements in this way, the purpose of the measurement is fulfilled. A little friendly competition doesn't hurt either.
Selecting a "Trade Contractor of the Month/Year" is an effective method of communicating not only performance results, but also reinforces their importance.
At Del Webb, Sun City AZ, trade contractors participate in the company's continuous improvement system. They got the trade contractors' attention when they were invited to participate in the company's bonus pool for suggestions. $20,000 is divided among the best improvements in the categories of "better, faster or for less cost" with a grand prize for overall. Payback came with hard costs that have come down about 5 percent. That's enough to double profits for most builders.
Builders who seize the opportunity to design a performance measurement and recognition system are often rewarded by getting what is measured. What areas of trade contractor performance would you like to see improved?