Executive Summary A “meets output targets” location can still be underperforming if overtime, attrition, and safety incidents signal hidden cost, process breakdowns, and operational risk. The right way to evaluate “true performance” is to score it on outcomes AND the conditions required to sustain those outcomes—cost-to-serve, workforce stability and capability, safety/compliance, and process health.

Key Recommendations (How to evaluate true performance)

1. Separate “Production Results” from “Operating Health”

• Production results (lagging): units/throughput, quality rate, on-time delivery, rework/scrap, productivity per labor hour.
• Operating health (leading/diagnostic): overtime intensity, attrition/turnover, safety incident rate and severity, training sufficiency, downtime, and process adherence.

Why: overtime + attrition + safety events typically mean you’re borrowing capacity from people and exposing risk that will eventually hit delivery, quality, and cost.

1. Use a balanced scorecard with explicit thresholds

Create a simple scorecard that forces trade-offs to be visible:

A) Results (40%)

• Output vs plan (by shift/day)
• Quality (defects, returns, rework)
• Delivery performance (OTIF / schedule adherence)

B) Efficiency & Cost (25%)

• Overtime % of total hours (or overtime hours per 1,000 labor hours)
• Labor cost per unit / cost-to-produce
• Absenteeism + unplanned absence cost impact
• Overtime trend (is it improving or rising?)

C) Workforce Stability & Capability (20%)

• Voluntary attrition rate (last 6–12 months)
• Time-to-fill and time-to-productivity
• Internal mobility (if applicable)
• Training completion vs role requirements (and training hours per new joiner)

D) Safety, Risk & Compliance (15%)

• TRIR/recordables and severity rate (not only incident count)
• Near-misses and corrective action closure time
• Repeat incidents by area/process

Important: Safety should have “red line” thresholds—if breached, overall performance cannot be “good” regardless of output.

1. Convert the “symptoms” into a cost and risk view

• Overtime: measure it as a cost amplifier and a burnout indicator.
• Look at pattern: “overtime to cover understaffing” vs “overtime for peak production.”
• If overtime is chronic, it often indicates poor staffing plan, poor scheduling, high downtime, or weak constraint management.
• Attrition: treat it as a capability and process sustainability risk.
• Identify whether attrition is clustered by shift, role family, supervisor, or specific job tasks.
• Safety incidents: treat them as operational process failures.
• Classify by type (e.g., PPE/non-compliance vs equipment/process vs training-related) and map to root causes and repeat drivers.

1. Compare “against peers” and “against the location’s own trend”

A location can look okay vs absolute targets but be worsening. Evaluate:

• Month-on-month trend for overtime, attrition, and safety (last 3–6 months).
• Same period vs peer sites with similar output levels.
• Shift-level analysis: which shift/line “creates” the overtime and incidents?

1. Ask one core question: “Is output being achieved sustainably?”

Use a structured sustainability test:

• If overtime were reduced to a normal staffing band for 4–6 weeks, would output fall (capacity problem) or would it reveal hidden process loss (improvement opportunity)?
• If turnover continued at the current rate, could the operation maintain capability and quality over the next quarter?
• If safety incidents were eliminated (via process correction), would output remain stable or would it uncover unsafe speed/shortcuts?

1. Perform a quick “Root Cause Lens” (fast, practical diagnosis)

Common patterns that explain “high overtime + attrition + safety incidents” even when output meets targets:

• Staffing & scheduling gaps (wrong staffing model, poor shift balancing, weak forecasting)
• High rework/scrap and unplanned downtime forcing overtime to recover schedules
• Training gaps (new-hire ramp-up, refresher training, competency variance)
• Supervisor effectiveness and workload (capacity for coaching vs firefighting)
• Safety culture/process weaknesses (equipment condition, housekeeping, SOP adherence, weak corrective action closure)

How to translate this into a decision

• Overall performance rating should be conditional:
• “Meets output” can be rated “Operationally unstable / High risk” if overtime + attrition + safety exceed thresholds.
• Require an improvement plan with measurable levers, not just “continue efforts.”

Business Impact (why this matters)

• Cost: chronic overtime inflates labor cost and increases absenteeism and replacement costs.
• Risk: safety incidents can lead to regulatory exposure, downtime, and reputational damage.
• Delivery & quality: attrition erodes skill continuity; safety and quality issues often rise when people are overworked and turnover is high.

Risks (if you don’t evaluate true performance)

• You reward short-term output and inadvertently encourage unsafe shortcuts or chronic understaffing.
• You miss leading indicators until a major incident, capability gap, or sustained service failure occurs.

Immediate Next Steps (practical rollout)

1. Build the True Performance Scorecard for the location (1 week)

• Define 10–15 metrics max, with thresholds.
• Add “red-line” safety criteria and an overtime/attrition warning band.

1. Run a 30-day diagnostic “Operating Health Review”

• By shift/area: overtime drivers, staffing vs demand, downtime/rework, training status, incident types.
• Identify top 3 root causes that connect all three symptoms (overtime, attrition, safety).

1. Launch a targeted corrective action plan with owners

• Staffing/scheduling fixes (forecasting accuracy, coverage gaps, reduce unplanned absence risk)
• Capability fixes (role competency matrix, onboarding + refresher schedule)
• Safety system fixes (SOP adherence checks, near-miss reporting, corrective action closure SLA)

1. Set a leadership cadence

• Weekly: overtime + safety leading indicators review
• Monthly: attrition trends + capability/training health + corrective action closure

If you need, I can also provide a one-page “True Performance Scorecard” structure (with example thresholds and how to compute each KPI).

If you need help implementing these recommendations or would like expert guidance tailored to your organization, the team at Zunavish would be happy to assist.