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Humtown Products hailed for creative efficiency-based pay rate system

Humtown Products, a solution provider in the metal casting industry, has been invited to meet with researchers at the Massachusetts Institute of Technology (MIT) thanks to the Columbiana-based company’s strong performance following the economic collapse of 2008. The invitation from the prestigious research university comes with interest in CEO Mark Lamoncha’s innovative tactics that ultimately saved the company.
Lamoncha’s father founded the company in 1960 when the steel industry was booming across the United States. Needless to say, economic needs have drastically shifted, causing the company to downsize from 220 employees to 17 in 2008. “The whole industry in 2008 was off 70-percent in sales,” explains Lamoncha. “Most companies don’t survive it.”
To Lamoncha, the answer has been to provide his small staff with incentives to increase their efficiency. Following the layoffs, Humtown instituted an efficiency-based pay rate system that calculates productivity as often as 20-seconds. The incentives ultimately saved the company. “In 2012, 26 people put out the same production sales as what 151 did in 2008,” Lamoncha notes, adding that the system isn’t being done anywhere else in the country.
While the system has proven beneficial to Humtown as a company, employees themselves are now able to pinpoint strengths and weaknesses in order to improve their performance, thus generate more income. “[Employees] study their own work habits and improve on them,” Lamoncha explains. “Their body mechanics, their method of movements, and motivation affect their pay rate based on each cycle of operation.” It’s the proverbial “win-win” scenario.
Big picture, Lamoncha hopes his system will help alleviate suffering not just within the Ohio economy, but nationally as well. He sees his pay rate system as an answer to what he describes as America’s low efficiency levels.
“Our biggest focus is on extreme efficiency improvements to reduce cost and sell product, being able to compete and leverage against the market price,” says Lamoncha. “That’s where America needs to be if they want to sell products here and abroad.”
Source: Mark Lamoncha
Writer: Joe Baur
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