Supervisors and managers analyzed their operations and selected one or more elements of production that needed improving. For example, one production problem might be the first element, the rate of output. Supervisors then focused their attention on stimulating workers to produce more. In another unit, the rate of production might have been satisfactory, but the error rate unacceptable. In that case, the problem was quality control. Of course, some units suffered from several problems simultaneously, increasing the range of tactics supervisors had to emplov. The analysis phase is straightforward and uncomplicated if problems are obvious to both supervisors and managers. If the problems are not clearcut, supervisors may use some version of cost-benefit analysis to detect where productivity savings can be best enhanced.

Baseline data on performance is essential to the analysis of production problems. Supervisors must have data on production and error rates to pinpoint which areas need improvement, analyze their operations, and identify factors that block performance. With a data base in hand and an understanding of factors blocking performance, the supervisors can enter the third phase of the process, feedback.

The fact that workers privately record their own progress on the standard or element of work selected for improvement should not be taken lightly. This aspect of the program makes management feedback to employees more forceful, since it arises from the employees' own efforts. To encourage workers, supervisors developed simple forms to record the output of each employee. The supervisors made sure that workers kept records daily, and they audited the forms each week to ensure their accuracy.

As an example of one of the many forms developed in OFA, the Assigned Home Mortgage Section's form is on Chart 2, "Example of a Worker's Weekly Record.

Besides tracking output, supervisors worked to overcome any factors blocking high performance. For example, if employees were consistantly making the same mistakes, the supervisor investigated the causes and assisted in correcting them. Simple feedback or training was sometimes is all that was necessary in such situations.

The most important aspect of feedback was that it was direct and private between the supervisor and individual workers. Performance records were seen only by the worker and the supervisor. At the same time. the supervisor maintained aggregate records of the whole work unit and publicly charted the progress of the group over time. Workers could then judge their performance in relation to the group.

The last phase, positive reinforcement, consists of three parts: self-reinforcement, supervisory reinforcement of workers, and management reinforcement of supervisors.

3. Correct wording on Foreclosure Statements.

4. Include all back-up material in order to do a thorough review.

5. Counting required years and/or days for computation of Service Charge

6. Change paid-in-full date..

7. Not taking into consideration taxes paid which are not reflected on the Mortgage Account Statement or omitting other transactions in preparing paid-in-full statements.

8. Using the incorrect daily rate for the computation of Interest and Service Charge.

Workers received daily reinforcement for their work by completing their daily record sheets, which was an immediate indicator of their own progress. In addition, the supervisor periodically reviewed the daily forms and rewarded improvement in worker performance. The rewards consisted of the positive reinforcers management identified in the first phase of the program. Managers also reinforced supervisors for improvements in productivity in their work units.

The four sequential phases--training, analysis, feedback, and positive reinforcement--are the basic components of the program. HUD's Office of Finance and Accounting used these steps in improving the performance of its workers.

CHAPTER 3

RESULTS ACHIEVED IN HUD'S OFFICE OF FINANCE AND ACCOUNTING

HUD's approach produced marked improvement in the performance of several work units in OFA. One unit, the Assigned Home Mortgage Section, will be discussed to illustrate the improvement.

The Assigned Home Mortgage Section processes mortgages on HUD-held property. The work involves calculating interest and service charges, filling out foreclosure statements, and carrying out other duties involved in processing mortgage forms. After collecting baseline data on the section's work, the supervisor decided that improving the overall accuracy rate from 82% to 92% was the major target for his group. After the fourth week of the project, the work unit met and surpassed the target. After the eighth week, the group had achieved a 99% error-free rate. They maintained the rate within a percentage point for the 26 weeks that data were collected. In addition, the group's workload rose from 78 cases processed in the first week to over 1200 cases processed in the 10th week. The unit absorbed the workload increase with no decline in accuracy rate. The data for the work section are in Chart 3, "Assigned Rome Mortgage Section's Productivity Improvement."

Other groups achieved similar results. For example, the Property Sales Section averaged 136% of its baseline for processing cases after the project started. The unit achieved that average in 9 weeks after reaching its original goal within only 3 weeks. Other groups set different goals such as:

timeliness-the Distributive Shares Section began paying
over 95% of its cases within 30 days whereas previously
none were paid within that time.

reduction of errors/exceptions-the Terminations Section
began averaging 205 corrections over a base of 100.

reduction of backlogs-the Correspondence Section
reduced a backlog of unfiled forms from over
83,000 to only 13,500.

Other units recorded similar dramatic improvements, indicating the approach's considerable success.