South Africa’s labour productivity, in the manufacturing sector, is low when compared to Korea, the United States of America (USA), Taiwan, Japan, France and the United Kingdom (UK) (Klein 2012). It lacks both short- and long-term growth in productivity (UNIDO 2013). The South African manufacturing industry only achieved 36% of the USA productivity level in 2014 (Conference Board 2015). Hence, this study investigates whether the shop floor management (SFM) strategy has the ability to improve productivity in the selected automotive parts manufacturing company.

Scholars have described the SFM system in different ways. Hanenkamp (2013) defined it as a process designed to empower the workforce so that they make decisions and solve problems appropriate to their level in the organisation. The logic is that the people closest to a problem or opportunity are in the best position to make decisions for improvement if they have control of the improvement process. According to Suzaki (1993) (a Japanese employee engagement philosopher), SFM is a practice of three reals (that is, Genba, Genbutsu and Genjitsu). Genba refers to the real place or the location where the value is created, while Genbutsu refers to all those associated to understand the nature of all problems. Genjitsu is the third real that draws a connection between the current problems and the root causes. Thus, Suzaki (1993) defines SFM as a closed loop process that helps observe problems on site and eliminate the root causes of such problems. In return, this will have a positive impact on productivity. A slightly different approach sees Peters (2003) explaining SFM as the focus on the lower levels (namely the shop floor operators) to react quickly to process failures. Hanenkamp (2013) justifies the above explanation by stating that the empowered shop floor teams with profound understanding of shop floor standards and targets sustain the business’s attempt to remain competitive and profitable.

Womack (2008) indicates that SFM is not literally mentioned in the earlier versions of the Toyota house of lean principles. However, there are several connections between the Toyota lean principles and SFM, which include developing and managing shop floor operations and workers. According to Hertle et al. (2016), SFM is one of the major management approaches in lean production. Through activating the potentials of employees, SFM aims to improve the business processes by developing the competencies of the employees (Hertle et al. 2016). Hence, this study examines the influence of SFM on labour productivity in automotive parts manufacturing businesses.

Larteb, Benhadou, Haddout and Nahla (2016), who referred to SFM as shop floor control (SFC), indicate that the key to lean performance is through the implementation of a daily SFC system. They mention that SFC enhances process improvement in all sectors of the industrial economy. In order for companies to succeed and enhance their productivity, daily contact with the shop floor is vital. Hence, this study is guided by the following two research questions (RQ):

For an organisation to evolve, people working within it have to be involved in processes that improve the organisation’s productivity (Business Victoria 2016). The people-involving initiative of SFM is employee engagement. Thus, shop floor employee engagement is a psychological and physical demonstration of what the employee understands of their role in the organisation, and the commitment of stewardship that manifests in high productivity levels in their work (Geldenhuys, Laba & Venter 2014). Employees that engage with their organisations and those that feel a sense of belonging remain loyal and concern themselves with productivity in their roles (Guest 2014). Despite the acknowledgement of its importance in business, low levels of shop floor employee engagement are reported globally. The percentage of highly-engaged shop floor employees is reported to be 13%. However, 26% are reported to be disengaged (Illing 2012). Bersin (2015) lists the elements that negatively affect shop floor employee engagement as an absence of meaningful work, a less inclusive workplace and a disregard for opportunities for growth. Employees should be recognised as a company’s most important resource and a driver for changing processes within the production area (Röhrle 2009). Therefore, the employee potentials should be utilised and appropriately developed (Grundnig & Meitinger 2013). This process will lead to the shift of decision rights from supervisors to employees. Managers will then act as coaches to train employees in methodical aspects of their work. Subsequently, this enhances productivity at the shop floor level. Various studies show a positive correlation between high levels of shop floor employee engagement and productivity (Gallup 2016; Guest 2014). However, previous studies (Dobre 2013; Illing 2011; Polster 2013) have not shown the effectiveness of an SFM system as an intervening variable for productivity in the automotive manufacturing industry in South Africa.

The next section discusses the theoretical framework of the study. It elaborates on an overview of SFM, as well as the effects of shop floor processes through housekeeping. A discussion of SFM and labour productivity concludes the literature review of the study. The research methodology exploring the research design, data collection, as well as the measurement and data analysis discusses the approach employed in the study. Study results, followed by the related discussion, implications of results for policy and practice, study limitations and future studies required, conclude the article.

This section discusses an overview of SFM. It discusses the effects of shop floor processes through housekeeping. The section elaborates on SFM and labour productivity, and presents SFM as a process for employee engagement. Exploration of employee motivation and teamwork as SFM tools concludes the section.

The method for this research will be discussed under the following headings: research design and approach, company that participated in the study, data collection, as well as measurement and data analysis.

This section presents results for the pre- and post-SFM means comparison, as well as labour productivity.

This section analyses data using factorial designs. It incorporates box plots to determine whether the factorial ANOVA assumptions of normality and homogeneity of variance have been met. Porkess (2005) explains that the populations represented should be normally distributed (that is, the normality), making the mean an appropriate measure of central tendency. However, the homogeneity of variance indicates that the population from which the data are sampled should have the same variance.

The Bartlett’s test was used to verify whether the variances were equal for all the samples (Curwin & Slater 2002). Figure 1 shows the summary of the results from Bartlett’s test for homogeneity of variances.

Table 5 presents detailed results of Bartlett’s test for homogeneity of variances for labour productivity, spoilage rate, absenteeism rate as well as housekeeping.

The p-value in the Bartlett’s test (at p > 0.05) shows that the homogeneity of variance is violated. The p-value at 7.520 is above the significant level of 0.05. Therefore, the variances are not equal, given the amount of variability in the variances that can naturally occur in the data. This is confirmed by Levene’s test of equality, shown in Table 6.

Porkess (2005) defines Levene’s tests of equality as an inferential statistic used to assess the equality of variance on different samples. In Levene’s test of equality, the statistical procedure assumes that variances of the populations from which different samples are drawn are equal. However, the results in Table 6 show that the obtained similarities between the variances in the samples between the pre and post data sets at p-value 0.604 did not occur. They are above the statistically significant value of 0.05. The associated plots in Figure 2 confirm the results.

Figure 2 shows the mode of change from pre- to post-SFM system periods are homogeneous. However, the box plots indicate that the variances for spoilage, absenteeism and housekeeping rates are not equal. This was confirmed by both Bartlett’s and Levene’s tests results.

This study investigates the influence of the SFM system on the improvement of labour productivity in an automotive parts manufacturing company in South Africa. It examined the production and related experience of the parts manufacturing company that has adopted an SFM strategy for its employees. Quarterly time series data on absenteeism, spoilage and housekeeping were used to analyse data. Results indicate that housekeeping and SFM have no relation to labour productivity. However, it revealed that the both the absenteeism and spoilage rates have a relationship with labour productivity. This is supported by Bhuvanaiah and Raya (2014) who indicate that, during the process of the SFM system, employees become self-motivated, driven and energised to perform to the organisation’s expectations. Furthermore, Riegger (2011) adds that an engaged shop floor employee is aware of business context and works with colleagues to improve performance within the job for the benefit of the organisation.

Organisations in South Africa should revise their performance management systems and develop SFM strategies, policies and practices that help to achieve new business goals and support organisational and cultural change (Wranx 2016). This must be based on an understanding of the economic factors affecting employee engagement and motivation, and the significance of the psychological meaningfulness of work that influences shop floor employee engagement for productivity improvement. Besides the achievement of study objectives, the following conclusions can be made on the SFM philosophy:

The study was limited to an automotive parts manufacturing company within the eThekwini District Municipality. The investigation was conducted in a single company that has adopted the SFM system. As there are 378 registered automotive parts manufacturing organisations in South Africa (SAinfo 2008), the results cannot be extrapolated to other companies within the sector. Secondly, it did not examine the process followed during the SFM implementation including (among others) the individuals that participated in the implementation process. It only used quarterly time series data to determine the pre- and post-labour productivity effects resulting from the SFM strategy. Lastly, the econometrics model used was of the OLS variety, solely due to data constraints. Future studies ought to use the more advanced Johansen VAR methodology or panel data analysis, both of which rely on large data sets.

SFM is an appropriate employee engagement process that creates a working environment that encourages worker participation and commitment. Properly implemented and managed, the system results in employee performance improvement. Psychological meaningfulness and motivation play a role in shop floor employee engagement (Geldenhuys et al. 2014). Consequently, the study revealed the relationship between both absenteeism and spoilage rates and labour productivity in the selected automotive parts manufacturing company. It is an approach that takes advantage of a focused organisational strategy to combine employee communication, decision-making and participation. The system can be used for developing employee capability in the organisations. Hence, the employees will have the capabilities to solve organisational problems (Alazzaz & Whyte 2015).