13. Creating the Human Resources Alignment
With Kristine Nissen and Joyce Friel
The role of Human Resources (HR) is varied across companies. But, when launching a change initiative, the HR arm of the company can take a leadership role in that initiative. When considering a Six Sigma deployment, several parts of the deployment plan are directly linked to HR. Although HR leaders are not usually billed as deployment leaders, the HR leaders can still drive the quality of the deployment by supporting the new Six Sigma infrastructure to do the right things.
A Six Sigma deployment includes defining and implementing a supporting infrastructure, including steering teams, Initiative Champion, Deployment Champions, and Project Champions. In addition, the company creates almost overnight literally hundreds of Master Black Belts, Black Belts, and Green Belts. Now creating and leading steering teams and project teams becomes the priority.
So, HR must look change right in the eye and not back off. Six Sigma deployments have required the realignment of almost every organization in the company and the creation of completely new job positions and expectations along with new career ladders. HR can readily impact the company’s ability to lead teams and develop new coaches and mentors (Master Black Belts and Black Belts) throughout the company. Even the rewards and recognition systems will be modified to reflect the new culture change.
And finally, HR departments can also lead the company during the early days of Six Sigma deployments in driving Six Sigma process improvement on their own processes. Here is a rough list of no fewer than 21 different processes HR commonly manages:
1. Employee benefits/payroll/HR
2. Hiring and selection process
3. Orientation
4. Annual enrollment—benefits
5. Relocation
6. Terminating/transfer employees/severance
7. Plant closure and acquisition
8. Performance reviews
9. Salary increase/budget
10. Paying employees/retirees
11. Employee incentive programs
12. Retirement process
13. Education and training of employees
14. Reward and recognition
15. Recognition service awards
16. Union negotiations
17. Managing expatriates
18. Record keeping
19. Government compliance and reporting
20. Vendor management
21. Results through people
To have all these processes simultaneously operating at world-class levels definitely takes a few Black Belts and Green Belts doing a lot of projects. What better way for HR to take a leadership role in the deployment than taking a leadership role in applying Six Sigma to their processes?
HR is complex and multifunctional. There are many ways HR impacts a new initiative’s deployment quality. From a Six Sigma deployment viewpoint, some of HR’s general roles are as follows:
1. Assist in personnel selection.
2. Develop workforce practices that enable Black Belts and Green Belts to achieve high performance in their workplace.
3. Work with executives and managers to establish appropriate recognition and rewards.
4. Develop Six Sigma education and training support that will contribute to employee performance.
5. Assist in establishing appropriate career plans and career paths for Master Black Belts, Black Belts, and Green Belts.
6. Track key players (Champions, Black Belts, and Green Belts) for “success profiles.”
7. Provide input to the personnel selection and future hiring process.
8. Work with Business Leadership to ensure
a. Consistently successful Black Belts and Green Belts are recognized and developed further.
9. Assist MBBs, Black Belts, and Green Belts in developing their training plans.
10. Assess organizational readiness for change.
11. Sponsorship assessment.
In this chapter, I will address several opportunities for HR to take a clear leadership role in Six Sigma change. As you can see, the HR role in making the Six Sigma deployment smooth is critical.
• Talent selections
• Job descriptions
• Training plan development
• Succession planning
• Reward and recognition
• Career planning
• Compensation
• Retention and career planning
• Deployment support
Six Sigma Organizational Structure
The roles within the Six Sigma deployment infrastructure include the following:
• Steering Committee
• Champions
• Process Owners (Project Sponsors)
• Black Belts
• Master Black Belts
• Green Belts
• Team Members
The roles that are most amenable to HR support are those of Master Black Belts, Black Belts, and Green Belts. These are essentially new positions within the company. Their roles have been discussed in Chapter 8, “Defining the Six Sigma Infrastructure,” so be sure to review those. A quick review of the Belt roles follows.
Master Black Belts
• Technical leader in Six Sigma, methods, and tools.
• Respected at all levels.
• Coaches and supports Black Belts for results.
• Delivers Six Sigma training.
• Assists in project identification.
• Partners with Six Sigma Champions.
• Identifies and deploys best practices.
• Participates in a one-year development program.
Black Belts
• Change agents for institutionalizing Six Sigma.
• Respected across the organization.
• Proven hard and soft skills.
• Leads strategic, high-impact process improvement projects.
• Masters basic and advanced quality tools and statistics.
• Deploys techniques of measurement, analysis, improvement, and control.
• Participates in intensive four-week training program.
Green Belts
• Change agents for institutionalizing Six Sigma.
• Respected within their organization.
• Proven hard and soft skills.
• Participates in strategic, high-impact process improvement projects.
• Masters basic quality tools and statistics.
• Helps deploy techniques of measurement, analysis, improvement, and control.
• Participates in a two-week training program.
Several issues reside with the creation of Belt positions and the selection of Belt candidates. These issues include whether to develop Belts internally or hire them from outside the company. Once that issue is resolved, the next issue is: Are the Belts full time on project work or part time—this topic is usually very controversial. And, finally, the last question is: How many people are to be trained over the first year? Rough forecasts of the total training volume are necessary to put together a good annual training plan.
Talent Selections
Develop Black Belts and Master Black Belts or Hire from the Outside? There is a tendency in some companies launching Six Sigma to try to kick-start the program by hiring a bunch of Black Belts and Master Black Belts from other companies. In a sense, they try to buy the change program. The action might seem to make sense because these new resources are ready to go. But you can’t ignore the reality that Black Belts can be trained and launched in four months or less and Master Black Belts in a little over a year. I worry about the message you are sending if you bring in a lot of new people from different companies. Current employees may be thinking, “Why wouldn’t the company invest in us, and who are these people?”
Because Six Sigma is customized for each company, the training curricula holds commonality with the training in other companies, but the training will not be identical. So, even though you hire a trained Black Belt from another company, you will invariably have to retrain him or her. The new resources will have to understand the new roadmaps and tool sets that your company is using. They will, unfortunately, have a tendency to second-guess any difference in your approach because their previous approach worked for them and must be better.
From the consulting side, I have seen trouble occur from these newly hired resources even to the point of sending the new resources on to other companies. My strong feeling leads me to believe it is much better to develop your own people first. If you find gaps in capability, then it may be time to hire from the outside. There exists a range of skills in Six Sigma that are found across the industry. Subtle and major differences in the training curricula exist, so a Black Belt from Company A is not necessarily the same as a Black Belt from Company B.
For example, the original Master Black Belts within GE went through a two-week training program, and that was it—poof, they were MBBs. Alternately, the Master Black Belts initially developed within AlliedSignal accomplished a one-year development plan that included weeks of training in advanced statistical tools, plus training boot camps to hone their training skills. There was a radical difference in the capabilities of the GE Master Black Belts compared to the AlliedSignal Master Black Belts. The GE Master Blacks were more involved in Six Sigma deployment activities than mentoring Black Belt and Green Belt projects.
I have seen other differences in Six Sigma training even within a large company. One division might conclude that three days is all that is needed to train a Green Belt, and another division might stick with the traditional two weeks of training. The lesson learned here begs you to perform a thorough assessment of the skills for any Belt hired in from another company. This is where your Six Sigma consulting company may be able to help. The consultants can interview candidates and give you objective feedback concerning the match of skills to your program.
External hires will always have different understandings of the Six Sigma program and have different paradigms for improvement. To add to those inconsistencies, it takes longer to hire from outside and ramp them up when compared to growing your own BBs. Add to that the more important dynamic—your own employees feel slighted, and not as appreciated or invested in. I recommend you grow this program internally. The HR function will have a significant influence on the direction the Six Sigma Steering Team takes on this issue. It is best to think about it ahead of time.
Do the Belts Work Full Time on Project Work or Part Time? The first impression that leadership gets in the early days of a Six Sigma deployment is that with all these Belts running around doing projects, how are we going to hire enough extra people to get the job done? Whether to have BBs work full time on project work is always a serious question early on. Table 13.1 shows a comparison of full-time and part-time Black Belts.
Table 13.1 Comparison Between Full-Time and Part-Time BBs
The tendency is to think full-time BBs must be backfilled. I suspect that full-time BBs can remain in their current position, but parts of their former responsibilities must be delegated. Full-timers might report to the Champion and part timers would report to their old boss. So there might be a difference in the new reporting structure. The big difference between full- and part-time BBs is that the full-time BBs are 100 percent on their projects and the part-time BBs are less than 50 percent time on the projects. My data shows the percent of time on project for part-time BBs is anywhere from 5 to 30 percent. Because of the time allocation, full-time BBs are expected to complete three to four projects per year, and part-time BBs will be lucky to get two projects done. So, what’s important? Maintaining the old culture and miss opportunities to improve, or commit to the new process and drive your business strategically in the right direction?
My sense is that all the controversy over full time versus part time is a waste of time. If your leadership group commits to doing a great job in selecting high-impact projects, the nature of the projects themselves will drive the decision about resource allocation. If you’ve identified a project that your financial people say will bring over $1,000,000 to the bottom line, you’d be shooting yourself in the foot by allowing the BB to work only 30 percent of his time on that project. If you pick great projects the right way, allocation takes care of itself. From the HR standpoint, you will help your leadership clarify the model that best benefits the company and the individual.
From my AlliedSignal experience, we did a great job of selecting projects and assigning resources. Almost all the BBs in my program were part time, but worked their important projects full time. Select good projects and make sure they get done! All good leaders do that.
To help the organizations participating in Six Sigma answer the question about full versus part time, have the Six Sigma stakeholders perform these exercises as a group. This exercise should take about 45 to 60 minutes.
• If your company has not yet decided whether to use full-time or part-time Belts, brainstorm the following:
• What are the benefits/risks of each choice?
• Classify the benefits/risks as either people related or financial related.
• If your company has selected to use full-time Black Belts, brainstorm the following:
• What are the potential risks as people are removed from their current positions?
• How can we help mitigate those risks?
• Backfilling
• Workload shifting
• Are there specific actions required?
• If your company has selected to use part-time Black Belts, brainstorm the following:
• What are the potential risks to the success of the improvement program?
• What are the potential risks to the success of the Black Belt?
• How can we help mitigate these risks?
• Are there specific actions required?
How Many People Do You Train? When putting together a training plan in Six Sigma, the schedule is built around what we will call waves of training. “Wave” is a Six Sigma term that is equivalent to “class.” To say that you will schedule three waves of Black Belts is the same as scheduling three classes of Black Belts. HR has a leadership role in determining the number of students per wave and the number of waves of Black Belts and Green Belts per year and in what organization.
Class size for Black Belt and Green Belt training ranges from 15 to 50. Most training experts flinch at a class the size of 50. But 50 works if structured correctly. Six Sigma training includes a lot of work on laptop computers, and each module has a standup exercise built in for groups of four to six students. So, at any one time, the student is either working individually on their computer or in small group exercises. But the maximum number of students per class should be set by HR.
Recommendations for the number of students to be trained this year are found in the following table. The percentages in the table refer to the percentage of the entire population of the business sponsoring the training. So, you can plan on training 3 to 6 percent of the population as Operations Black Belts. The table shows approximate percentages for Black Belts and Green Belts and for Operations (Manufacturing), Transactional, or R&D. These percentages will give you a good start of the expected numbers to be trained to complete your training plan.
Reasonable Numbers of Trainees for the Annual Forecast
• Black Belts
• Green Belts
To determine a better forecast of training numbers, the following is a good HR exercise to do for each business or function. The exercise should take 45 to 60 minutes.
Workshop for Forecasting Volume of Students to Be Trained
• Begin with organization employee count:
• Try to estimate numbers within Operations, Transactional, and Design processes.
• Decide upon a target percent number for each process area and Belt level:
• Consider project opportunities.
• Consider resource constraints.
• Calculate Belt counts for process areas and Belt levels.
• Create a schedule for meeting goals:
• Two months to train GBs, four months to train BBs, and eight months to train MBBs.
• Consider training resource constraints, costs, number per course, and ability for organization to support.
The outcome of such a workshop should be a forecasted student load by business and sponsored by HR. Table 13.2 is an example for a Black Belt training plan for a $14 billion business consisting of several business units.
Table 13.2 Annual Training Plan Example Representing the Planned Number of Black Belts (by Division)
Belt Selection Process. Black Belts and Green Belts are the engine in the Six Sigma program. The candidates for these positions should be selected carefully. I know of one large company that would only allow those people in the high-potential list into the Black Belt program. I think that’s narrowing the focus of Black Belt training in that Black Belt training will create new high potentials.
A selection process should be designed to make certain the best employees are trained as Belts. The last thing a Master Black Belt who is doing the Black Belt training wants to hear in training is, “I don’t know why I’m here. My manager sent me.” There are several possible methods to select Belts that are dependent on the Belt level. Usually, the candidates are selected by the Deployment and Project Champions.
• Squeaky wheels
• Random
• Move around the poor performers
Good Selection Methods
• Manager recommendations (written)
• Formal applications
Table 13.3 shows some possible criteria for selecting Belts. The most important question is, “Can this person get the kind of results that are expected?” Before asking managers for recommendations or employees to volunteer, make certain they all know enough about the Six Sigma program, so they can make an educated choice.
Table 13.3 Criteria and Selection Methods for Black Belts, Green Belts, and Master Black Belts
The following is an example agenda of an HR workshop that leads to the development of a selection process to ensure consistency across the organization. This workshop should take about 45 to 60 minutes.
Workshop for Developing the Belt Selection Process
• Brainstorm potential criteria for belt selection:
• What qualities would you like to see in your belts?
• How might you compare one candidate to another?
• Brainstorm steps in selection process.
• Create selection process map:
• Start with SIPOC (Supplier, Inputs, Process, Outputs, and Customer) map
This workshop should generate the selection criteria for Belt candidates, such as what is shown in the next section. This is an actual appendix of a letter I sent to all the product development Champions in my sector of AlliedSignal. The first part of the letter was requesting names of Product Development Black Belts for the first wave of training.
Product Development Black Belts: Some Criteria and Information
Some Thoughts, Information, and Criteria for Selecting PDBBs
Personal training and development cycle for your PDBBs:
• A four-month cycle of skills building in the customer-linked commercialization process, variation identification, and defect elimination. Each month will be comprised of four segments: “Plan/Train/Apply/Review.”
The “Plan/Train” segments are in the first week of each month.
The “Apply” segment is back in the Product Development Black Belt’s business area working on his/her specific objective.
The “Review” segment is covered with “Apply” at the start of the next month with “Plan.”
• The four months will focus our Product Development Black Belts on applying advanced tools within the Customer Linked Commercialization process.
The Product Development Black Belt Training Cycle [WAVE 1] starts on April 15TH at the Omni Hotel in Richmond, Virginia. Detailed information has been sent out to you and your PDBBs.
Product Development Black Belts
According to Dr. Mikel Harry, an early leader in Six Sigma deployments, the most successful candidates have typically been individuals who have the potential to realize a synergistic proficiency between their respective discipline and the strategies, tactics, and tools of variation and defect elimination (Six Sigma).
• The suggested characteristics for candidates include resiliency, driven by a purpose, leads from knowledge, enjoys and is good at hands-on involvement, acts on fact, and can function as consultant, leader, or gladiator as appropriate.
• The individuals that you select should be expected to become a participant in the operational directing of your business. They should be able to help surface the most significant opportunities for improving your new product/process development process, new product quality, and new process consistency. You must be willing and able to put high expectations on them.
• The profile will probably include at least a four-year technical/scientific degree or its equivalent, new product and/or process development experience, and strong personal computer skills. Desired additional expertise includes experience in leading teams, training in basic statistics and/or control techniques, and effective presentation skills.
You can see that strong HR support will facilitate the launching of Six Sigma by sponsoring critical HR workshops soon after Executive Team training. Here are some of the considerations in supporting your organizations in selecting the right people.
Actions for Identifying the Right People
1. Understand the roles and skill sets needed in Six Sigma.
2. Identify available talent internally.
3. Work with management to free up existing talent and hire/backfill or delegate responsibilities as needed.
4. Coach/counsel those selected on the impact of the opportunity.
5. Aid/coach in adapting to the new role and giving up old responsibilities.
Developing Job Descriptions
Early in the Six Sigma deployment planning stage, HR will effectively support the deployment by understanding the new roles and requiring and facilitating the development of job descriptions for the new positions. New descriptions will be required for Master Black Belts, Black Belts, and Green Belts. The following is an example of a position profile for Green Belts. These position profiles drive consistency in selection criteria, as well as deploy the vision of the program. These position profiles act as catalysts for the upcoming change and also demystify the cultural change about to occur.
Position Profile
Position Title: Six Sigma Green Belt Salary Grade: TBD
Key Responsibilities
• On a part-time basis, lead and manage improvement projects in own functional area as assigned by Champions and Sponsors.
• On a part-time basis, support Black Belt projects.
• Coach improvement project team members on the improvement process and corresponding quality tools.
• Make regular reports to management on improvement project progress, barriers, and issues.
• Participate in potential project selection and analysis; advise BU staff on prioritization of potential projects.
Most Critical Skill Dimensions
• Functional/Technical
• User-level skill in basic product/process problem-solving techniques.
• Operational experience of meeting objectives.
• Two-year technical or professional education, or equivalent experience.
• Microsoft Word, Excel, PowerPoint, and Project mid-level user skills.
• Written and oral presentation skills.
• Think strategically:
• From experience and knowledge, considers a broad range of internal and external factors when solving problems and making decisions.
• Identifies critical, high pay-off strategies and prioritizes team efforts accordingly.
• Recognizes strategic opportunities for success; adjusts actions and decisions for focus on critical strategic issues.
• Analyze issues:
• Gathers relevant information systematically.
• Grasps complexities and perceives relationships among problems or issues.
• Seeks input from others; uses accurate logic and data in analyses.
• Persistently champion change:
• Challenges the status quo and champions new initiatives.
• Acts as a catalyst for change and stimulates others to change.
• Paves the way for needed changes.
• Manages implementation effectively.
• Management
• Foster teamwork:
• Builds effective teams committed to organizational goals.
• Fosters collaboration among team members and among teams.
• Manage execution:
• Assigns responsibilities.
• Delegates to and empowers others.
• Removes obstacles.
• Allows for and contributes needed resources.
• Coordinates work efforts when necessary; monitors progress.
• Develop systems and processes:
• Identifies and implements effective processes and procedures for accomplishing work.
• Commit to quality:
• Emphasizes the need to deliver quality products and/or services.
• Defines standards for quality and evaluates products, processes, and/or services against those standards.
• Manages quality.
• Coach
• Foster open communication:
• Creates an atmosphere in which timely and high-quality information flows smoothly between self and others.
• Encourages the open expression of ideas and opinions.
• Training:
• Ability to assess training needs of team members and determine appropriate training/development to transfer knowledge, skills, and abilities.
The following list presents a summary of the roles of Champions, Master Black Belts, Black Belts, and Green Belts. Workshops with the Six Sigma Steering Teams should flesh out the remaining parts of the position profiles. Some good work on defining the Six Sigma infrastructure operationally will be like oil on the gears of the deployment. The vision of the program will be operationally defined and clarified.
Champion
• Break Barriers
• Reward and Recognition
• Project Selection
• Monitors Project Progress
• Identify/Request Candidates for Training
• Recommends/Prioritizes BB Assignments (Time)
Master Black Belt
• Mentor BBs/GBs
• Training of GBs/BBs—Create and/or Extend Material
• Institutionalize Six Sigma Philosophy
• Leadership
• Communicator/Facilitator at All Levels of Management
• Identify and Communicate Opportunities
• Identify and Communicate Barriers
• Speak Language of Management
• Innovative Tool User
Black Belt
• Understanding “The Metrics”
• Team Player/Assistant
• Show “Extraordinary” Sense
• Expert in Applying Tools
• Mentors GBS/YBS
• Bias for Action
• Team Facilitation Skills
• Drives “Big Money” Projects to Completion
• Technical Background
• Proficient with Computers
Green Belt
• Understands and Applies Breakthrough Strategies—DMAIC
• Works with Workgroup Teams
• Works with BBs on Large Projects
• Basic Computer Skills
Succession Planning. When a person is selected for Black Belt training, what their role is during and after training depends on the full-time and part-time decision. All Black Belt students show up to the first class with a chartered project in hand, so project work starts on the first day of class. If the student is to be full time on the project, then the manager, the Belt, and their HR associate should be required to create a succession plan to cover his or her previous duties.
The Black Belt’s position should be backfilled or existing responsibilities reallocated as soon before the training as possible. I remember visiting one of my chemical plants and the Six Sigma Steering Team for the plant was explaining why their Black Belts could not be full time on project work. Then, suddenly, a Black Belt chimed in. “I’ll tell you why I’m not full time on project work. It’s because I’m doing a lot of things that a chemical engineer shouldn’t be doing in the first place.” And she was right.
The Steering Team admitted they could hire a few college interns to cover some of the Belt’s former responsibilities. The Steering Team had a new plant manager, who joined the company from another chemical company that had a Six Sigma program. He mentioned in a side conversation, “I know these people are worth $1,000,000 a year to me. Why shouldn’t I reallocate some of their responsibility, or even hire a few more to add to the ones I already have?” I was thrilled to have someone on the team who saw the value of the program.
Succession planning already in process should consider the addition of new future leaders to the succession pool. Although most Black and Green Belts enjoy the technical aspect of Six Sigma, most are interested in moving up the leadership ladder as quickly as possible. Most want to run a factory or a business by the end of their careers.
Consideration of the new leadership skills, developed as a Black Belt, should help drive the traditional succession planning. If the HR function helps muster the support for Six Sigma being formally considered part of the leadership development roadmap of your company, recruiting new Black Belts and Green Belts will be no problem.
Just as in the case of GE, once Welch sent out the edict that all future leaders would be certified Green Belts, the demand for Green Belt training was enormous. GE trained over 64,000 Green Belts in two years. Because the Belts are learning dynamic, real-time leadership skills while completing high-value projects, it makes sense to tie those efforts into the leadership career roadmap.
Certification Requirements. A standard feature of Six Sigma deployments is the development and implementation of certification requirements for the Belt levels. Some companies even certify the Champions. The HR function has the opportunity to lead the development of the company’s certification requirements and to archive the list of those certified. There are no industry-standard certifications, though some organizations offer that service. It is best for each company to develop the certification standards that best fits their culture. Certification requirements will vary from company to company and by Belt level. Table 13.4 summarizes the differences in certification among the Belts.
Table 13.4 Certification Guidelines for Different Belt Levels
Typically, certification criteria includes
• Attending all training.
• Successfully completing and reviewing projects.
• Examination—this has become more common for GBs and BBs. Not typically applicable for MBBs.
• Minimum savings—highly dependent on average project savings; varies heavily from company to company. Must decide whether soft savings should count toward certification.
• Training of others—teams, GBs, BBs, or Champions.
• Coaching and mentoring of others—applicable for BBs and MBBs.
The following is a short exercise that the HR function can put together with their Six Sigma Steering Team to draft certification requirements.
Certification Exercise
With each Belt level, discuss the following criteria:
• Number of Completed Projects
• How many projects do you expect GBs to complete successfully?
• Savings $
• How much do you expect an average project to return (consider ops, trans, and design)?
• Do you want to put a minimum amount of savings for the projects? Should this include both hard and soft dollars? What are the risks/benefits here?
• Exam
• Are you planning on having an exam? What are the risks/benefits?
• When/where/how will you administer?
• Training Others
• Will Belts be required to train others?
• Entire curriculums or just portions?
• Coaching/Mentoring Others
• Will Belts be coaching other Belts?
• Will it be GB to BB? Or experienced BB to BB, and so on?
• What do you want the mentoring hierarchy to look like?
• What is the criteria for successful coaching?
Do as much of this as you can. Assign action items to discuss further or set up plans.
Recognition and Rewards
Six Sigma deployments have a magnitude of culture change associated with it. Therefore, a clear, aggressive, and innovative rewards and recognition (R&R) program defined early in the deployment will give the deployment a great start. Every company has its own R&R system, and that is a good place to start with the new Six Sigma R&R system.
Because of the nature of Six Sigma, some innovative additions and modifications of the current system will be in order. As I previously mentioned in an earlier chapter, the engineered materials sector of AlliedSignal launched an entirely new R&R system called Winning Together. The system was sector-wide and included the entire population. As a company, AlliedSignal started a corporate-wide R&R program to reward outstanding applications of Six Sigma across the company.
The originator of Six Sigma, Motorola, established a fine program called the Total Customer Satisfaction (TCS) program. The TCS program sponsored a huge conference allowing the outstanding team within each business to present their Six Sigma projects and compete for corporate-level prizes. The team members were treated like royalty, being driven around in limousines and staying at the finest hotels. The program was highly effective in driving and rewarding the right behaviors.
Depending upon your company’s existing culture and vision of its future culture, a very robust recognition program can often mitigate the need for rewards. The best rewards and recognition plans treat the impending improvement program as part of annual performance planning process. Recognition in the form of career development is extremely effective because there is career advancement and recognition of talents and money (raises and stock options) involved.
Rewards in terms of compensation adjustments (annual bonuses, or raise/promotion process) are the strong part of every successful Six Sigma deployment. So, the combination of recognition through career advancement and reward through aggressive compensation becomes the dynamic duo.
A risk in Six Sigma deployments is that too much attention is put on the Belt (Master, Black, and Green). The R&R structure should touch all Six Sigma participants, not just the Belts. The new R&R systems should be primarily given based on results, not just participation. The following table suggests a few simple forms of recognition. The section immediately following outlines a potential workshop to develop methods of recognition for Six Sigma.
Suggestions for Recognition Actions
Suggested Workshop for Developing Recognition Methods
• Purpose: To identify opportunities for recognition within your improvement program.
• Exercise:
• List current recognition avenues in your company and improvement program.
• How might you use these to provide recognition to improvement teams?
• Brainstorm additional recognition ideas that you may use.
• List benefits and concerns for each idea.
• Create an action plan around next steps to have recognition program in place prior to first wave of belts.
• Time: 60 minutes.
Sincere thank yous are always great rewards. Table 13.5 presents possible reward methods, with notes. Along with recognition, there are rewards. The following list addresses rewards and Six Sigma:
• Rewards can be recognition based:
• Plaques, certificates
• Conferences
• Competitions
• Promotion potential:
• Exposure to upper management
• Monetary:
• Gift certificates
• Certification bonuses
• Annual performance raises or bonuses
• Best project competition awards
• Savings sharing
• SBTI has found that the best rewards are:
• Recognition
• Learning opportunities
• Career growth
• Competitive compensation tied to Belt successes
• We do not recommend sharing bonuses with the Belt and/or teams:
• Creates a “WIIFM” environment
• Drives competitive behavior between Belts and teams
Table 13.5 Other Reward Methods with Notes
Actual Examples of Reward and Recognition
Motorola
• Total Customer Satisfaction Competition: A formal company-wide competition, focused on impact of quality teams. TCS Competition is a big deal at Motorola!
• Competition started at plant level and worked up to corporate level.
• Corporate competition sites included Paris, Hawaii, Singapore, Bali, and so on.
• Reward was the trip and opportunity to participate.
• Site reinforced the global nature of the business.
• Similar competition launched in AlliedSignal with equal success.
• Highly recommended.
General Electric
• 40 percent of annual bonus related to Six Sigma activities.
• Green Belt certification required for promotion.
“With Six Sigma permeating much of what we do, it will be unthinkable to hire, promote, or tolerate those who cannot, or will not, commit to this way of work.”
—Jack Welch, CEO, General Electric (USA Today, February, 1998)
Company A, B, and C
• Company A
• Week 4 celebrations and stock options for BBs.
• Company B
• Nothing—BB projects part of everyday job.
• Company C
• BB graduation dinner with high-level executives.
• $500 to $5,000 for certification depending on impact.
• Gifts and stock options for teams.
• MBB received stock ($25K value) on certification.
• These stock awards were reduced later in the initiative.
Recognition and Rewards for Black Belts: Company D
• Company D
• Black Belt shirts given the second week to acknowledge participation.
• Technical conferences for presenting project results, sometimes to the next class of BBs.
• Much bigger pay raises—up to 2x of non-BB peers.
• Ability to nominate key team members for $500 to $1,000 bonuses.
• Individual write-ups in company newsletter with “blow-up” of article and picture to hang in office.
• Stepwise Recognition
• BB shirt during training.
• Dinner with Management with gift check for completing training.
• Bonus at certification commensurate with results; very nice trophy or plaque included with certification certificate.
Company A Approaches Career Path and Compensation
• Career Path/Title
• Black Belts are full time and have been given a title with the word “Black Belt” in it to reflect this role.
• They will stay at their current “rank” or “band” in the organization; that is, there is no common rank/band for these folks. Some came in at the Director level and will remain at the Director level; others are “junior” engineers and remain at that level.
• They are expected to remain in the role for two to four years.
• However, the president of the largest division made a commitment to allow any of them to return to their prior role at any time if they don’t feel that the Black Belt role is right for them.
• Compensation
• Base compensation does not change with the move to Black Belt.
• Any bonus potential to which they were previously entitled remains intact.
• All Black Belts receive 500 to 1,000 stock options at the completion of training (actual number still TBD).
• All Black Belts entitled to performance bonus based on the results of their projects—from 0 percent for no results to about 10 percent of salary—for meeting targets to greater levels if they blow the doors off their project goals.
• All Black Belts are “enrolled” in their EBITDA-based bonus program, which is tied to the performance of the company overall (this is incremental for most of them).
Belt Retention and Career Planning
Belt Retention. One of the unfortunate aspects of deploying Six Sigma is that there is now a premium on Master Black Belts and Black Belts in the corporate world today. Therefore, the Belts you train will be a highly sought-after asset in the market. Your Black Belt students will start getting calls from headhunters before they’re even finished with training. Entire headhunting firms have been created that do nothing but locate Six Sigma resources. My son went through my Master Black Belt training and he has had no problem finding great jobs.
What does this mean to you? You, as an HR professional, need to put retention actions to the forefront. Retention will be an issue. My sector in AlliedSignal focused heavily on retention, and out of 350 Black Belts training in two years, we only lost two, while the other sectors were losing Black Belts in high numbers. Table 13.6 shows some retention risks with potential solutions.
Table 13.6 Retention Risks and Potential Solutions
Even the best rewards and recognition program cannot prevent this, but people are motivated to work on tasks/projects that will be beneficial to their career goals. If you do a good job at keeping them on a learning curve with a clear career path, they are less likely to become dissatisfied. Black Belts and Green Belts are relatively easy to satisfy. You let them work multiple high-impact projects, provide them some good continuous education opportunities and some great recognition events, slide some impressive financial rewards in, and you will keep your Belts. They are special and treating them special (based on results) makes sense. They’re the future of your company.
Career Planning. Establish distinct links between success as a Black or Green Belt and the furthering of their professional career. Performance objectives should be linked to the project goals and reflect the Belt’s chartered projects. Champion and Business Leader/Plant Manager performance objectives should reflect project goals as well. Each Belt should have a clear career development plan established during the first year of their assignment. This should include the following:
• Growth opportunities as a Belt—other areas or facilities; training of other Belts or peers.
• Continuing education opportunities—additional training in advanced tools; post Belt role.
• Career advancement plans directed at positions.
The next exhibit shows a recommended workshop that HR professionals have held to directly address the issue of retention and career planning. This workshop should only last 60 minutes but should save the company a lot of lost resources by keeping highly qualified Belts around.
Workshop Addressing Retention of Belts
• Purpose: To identify retention risks and mitigate them.
• Exercise:
• Your ultimate goal is Belt retention.
• Brainstorm reasons why Belts may decide to depart.
• Logically group the reasons.
• Highlight reasons you can help mitigate.
• Identify steps and action items to assist risk mitigation.
• Time: 60 minutes.
Because Six Sigma relies on metrics to determine how good the program is doing, establishing HR metrics such as percentage of students certified, percentage of Belts that have left the company, and tracking the career progression of certified Belts is essential.
Six Sigma Deployment HR Support
There are multiple ways in which HR can support a deployment. Facilitating the communication plan for Six Sigma is necessary to aid in accelerating support to help the Belts effectively lead teams. There will also be a requirement to write a lot of letters to the troops by the leadership team. HR support in generating those letters will streamline the deployment.
Communication Plan. Once the deployment is designed, communication should begin. A Communication workshop should be held. The following questions should be answered and the plan crafted. See Chapter 12, “Communicating the Six Sigma Program Expectations and Metrics,” for more information on communication planning.
• Who do you need to communicate with?
• What are their main concerns?
• What is the best medium?
• Newsletter, email, v-mail
• Town hall or all hands, small groups
• Memo/letter, video, web page
• One-on-ones
• How often should they be communicated with?
Team Facilitation. With a Six Sigma deployment, hundreds of teams will be launched, and Black Belts and Green Belts will be new to this role. Because the projects are important, grooming your Belts to facilitate teams will be essential. In fact, this should be directly included in the Belt training programs. Focusing on team staffing is of concern. People who have a reputation of getting results often are overallocated to teams. HR should track the percentage of time that is spent by team members in teams. This is best centrally done, coordinating all team-based projects within the organization. The skills that should be deployed along with Six Sigma are team leadership support, facilitation skills, and conflict resolution.
Draft Deployment Letters. Considering the amount of communication necessary for any change initiative, support in drafting some of the initial communications is most welcome. Following is a sample letter from a company president concerning the impending Six Sigma deployment.
Specialty Chemicals Vision
Date January 10, 2001
To: Site Champions
From President
Subject: Process Metrics for Six Sigma Performance
Specialty Chemicals will become the number one or two in the businesses in which it operates. The number one or two positions should be in the areas of operations, customer value creation, global share, and profitability. Further, it will be a company that attracts, retains, and develops the best people in the industry. In terms of Operational Excellence, Specialty Chemicals will operate its facilities in a safe and environmentally responsible manner and produce, at lowest-in-industry costs, the high-quality products our customers expect. We should continually drive productivity and improvement in our global production assets.
Our History of Success
Specialty Chemicals has been itself a history of success in terms of manufacturing excellence, thanks to the good work, talent, and commitment of its people. Among other successes, we have built and started up new units all over the world, have operated and expanded our units in a sound manner, and have implemented cost reduction projects. However, this has not been enough in terms of keeping the pace with our competitors. New challenges are in front of us, and I am sure, like in the past times, we could deal with them in an effective and expeditious manner.
Our Challenge
Maximization of current capital and labor assets, as well as the best utilization of materials and energy, have become critical bases of competition in most manufacturing industries around the world. Superior and continuously improving operational performance is rapidly moving from a Strategic Advantage to a Strategic Requirement. The production of substandard products either in quantity or quality and yields is a clear waste of capital and labor assets, as well as money, and detracts directly from the competitiveness of a business.
We must each commit to improve our Operational Performance by 7 percent each year over the next three years. An improvement of this magnitude does not occur from continuing to do the same old things in the same old ways. . .or even from doing them a little better or faster. From today forward, we must focus our decisions, our actions, and our people on the journey to Premier Operational Performance. Six Sigma is a process that will enhance our current initiatives by means of incorporating into them powerful statistical tools. It is focused not only on further reducing costs, but also by increasing revenue in some cases. The main attribute of Six Sigma is to reduce variability in both operational and administrative processes, thus increasing productivity.
Your First Assignment: Each manufacturing plant leader, improvement Champion, and staff should focus on their most important strategic products and processes during the next 10 days. At each plant, the processes representing the majority of your business for 2001 should be examined utilizing the Six Sigma Process Maps and the Six Sigma metrics of Rolled Throughput Yield (RTY), Cost Of Poor Quality (COPQ), and Capacity Productivity (C-P). I would like to have your best inputs sent to my administrator by Thursday, January 25th. This effort will not be easy and must have your personal commitment, because it is critical to start our journey with the right first steps.
In mid-February, I will meet with the Manufacturing Council and our Business Leaders to review each of your inputs. To make this easier and more uniform across our many sites, we are including in this memo blank maps, the appropriate metric definitions, and your preparation instructions. Also, please find attached to this message electronic copies of each of these items for your use.
I would like to provide assistance, so please contact either Anthony, Less, or James if you need help in this important effort.
Thank you for already playing a critical role in the future of Specialty Chemicals,
Richard
There are a myriad of other issues on which HR can work. For example, if your company has a strong union, planning on how to address that issue early is very important. There’s also the whole change management arena in which HR folks have experience. Look at Six Sigma as a chance to take an HR leadership role. If the top Six Sigma companies are benchmarked, you will find a strong HR effort behind the deployment. The senior HR person will be a member of the Six Sigma Steering Team, so there will be ample opportunity to do great things early in the deployment.