One of the more ambiguous elements of a Six Sigma project is the level and type of compensation the organization should give to its Six Sigma leaders and team members. On the one hand, setting compensation is not an integral part of any stage of a Six Sigma project; on the other hand, compensation is an important instrument to build loyalty and a sense of accomplishment that is a crucial element to the organization's Six Sigma success. While there are no hard and fast rules for compensation for Six Sigma leaders and team members, there are some good ways to think about how to productively provide compensation to your people.
Black Belts are the key change agents for the Six Sigma process. They have an important role and should be compensated accordingly. If your organization is large enough to have people dedicated full-time to leading Six Sigma projects, their base pay should be in the top of your organization's range for their level of management. If your organization is asking a manager to also devote part of his or her time to leading a Six Sigma project, you need to find some way to compensate them for their extra efforts. In addition to base pay, you can find creative ways for recognition for completed projects. Black Belts should receive some special and public recognition for their efforts, whether it is dinners, award ceremonies, plaques, etc. Whatever fits best with your organizational culture. Such recognitions should not be strictly limited to Black Belts either, as acknowledging the achievements of all who participated in and benefit from the Six Sigma project should receive some sort of recognition to boost morale.
Monetary bonuses are another way to compensate people for successful Six Sigma projects. Since Six Sigma projects are about helping the organization make more money it makes sense to share some of the cost savings from Six Sigma projects with the Six Sigma team. Develop a structured, team-based process improvement bonus system that will appropriately benefit each worker in the organization. As measurable and lasting improvements are made to processes, it is appropriate to share a part of the financial gains with employees. Just be sure there is a formal performance appraisal system that will identify what is to be accomplished, what success looks and feels like, and how an employee will be compensated, and that this is fully communicated to everyone. Such an organizational goal-sharing program will effectively support Six Sigma efforts. Being able to link compensation to Six Sigma implementation is much easier in a small company compared to a larger company.
Bonuses can also be paid to Black Belts, but with differences due to their unique status. Instead of paying bonuses to Black Belts as a share of actual process improvement, pay them bonuses related to specific project goals. There is a danger in directly tying their bonus with a share of the actual improvements as they may be motivated to inflate or misconstrue actual gains. That still leaves you with many concrete project milestones that can be the basis for their compensation.
Laptop Battery Peter Peterka is President of Six Sigma us. For additional information on Six Sigma Black Belt or other Six Sigma Certification programs contact Peter Peterka at
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Biography Product Cover What Is Six SIGMA by Peter S. Pande; Rath & Strong; Pete Pande ( Paperback) Save $6.61 ! Six Sigma has gained an avid following among executives and managers for its ability to reduce cycle time, eliminate product defects, and dramatically increase customer involvement and satisfaction. But Six Sigma can't work without widespread employee involvement and commitment. "What Is Six Sigma "explains, for "employees, "the core ideas behind Six Sigma, the crucial roles and responsibilities employees have in a Six Sigma initiative, and how Six Sigma can benefit them.
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Microsoft Peter Peterka is the Principal Consultant in practice areas of DMAIC and DFSS. Peter has eleven years of experience performing as a Master Black Belt, and has over 15 years experience in industry as an improvement specialist and engineer working with numerous companies, including 3M, Dell, Dow, GE, HP, Intel, Motorola, Seagate, Xerox and even the US Men's Olympic Team. For partial list look here. Peter is a certified a Master Black Belt and holds an MS degree in Statistics from Iowa State and a BS in Chemical Engineering from Purdue. Peter worked for 3M over 10 years where he gained extensive experience applying Sigma Methodologies to a variety of processes.
Six Sigma became the global standard of quality business practice, embraced by the American Society for Quality. Universities worldwide now offer courses. Dozens of consulting and software companies have brought products and tools to market. By the end of 2004, over 200 books on Six Sigma were in print, and entering the term "Six Sigma" into Google returned some 2, 320, 000 hits.
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