Compensation and Six
Sigma Black Belts
By Peter
Peterka
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.
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 http://www.6sigma.us
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