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Dear Workforce How Should We Compensate Our Six Sigma Trainers

We are training our first "black belts" in Six Sigma and want to know how to compensate them. Should we give an increase in base pay based on getting certified in Six Sigma processes, or pay them a percentage bonus based on savings per project? Or both?
September 7, 2011
Related Topics: Total Quality Management, Compensation Design and Communication, Dear Workforce, Compensation

Dear Improving:

For those who are not familiar with the Six Sigma concept, it is essentiallya comprehensive process for examining business operations and taking action toimprove them. It involves three basic steps: identification and evaluation,determining improvements, and measuring specific performance. It is not totalquality management repackaged, but a way for all employees in the organizationto be focused and deliberate about improving the way the company conducts itsoperations. A person who is trained in Six Sigma techniques is called a blackbelt.

The Six Sigma process is a way to instill a continuous improvement mentality,and thus motivate all employees to higher performance levels. While I can'tspeak to what every company is doing, I will suggest to you that the role of theblack belt is to facilitate the Six Sigma adoption as part of the culture.Unless you are going to make the black belts permanent, I would not recommendthat they be compensated any differently than they are now, at least from a basepay standpoint. Recognition, on the other hand, is a different issue. Blackbelts should receive some special recognition for their efforts and the ways todo this are infinite (dinners, award ceremonies, plaques, etc.).

Bonus plans are a more complicated issue. As improvements are made to variousprocesses, and these improvements are measured, it is appropriate to share apart of the gains (generally financial) with employees. This means developing astructured, team-based process improvement bonus system. Each worker will needto participate in the appropriate type of bonus system. As an example, forplant-level employees you can use a plant-wide (as opposed to work team)gain-sharing or goal-sharing program very effectively to support Six Sigmaefforts. For a call center, you might have each customer team paid according toits own performance. This needs to be developed, integrated and managedstrategically.

Would you provide bonuses for black belts? My answer is yes, but withqualifications. I do not believe you should pay the black belts for the actualprocess improvement that they facilitate. Instead, pay them bonuses according tospecific goals around successful rollouts. That is, as they are able to delivertraining and facilitate successful team improvements, pay them bonusesappropriately. My difficulty in providing them with a "piece of the action"(share of the actual improvements) is that they may be motivated to inflate ormisconstrue actual gains. There need to be some checks and balances built in tothis.

As Peter Pande, Robert Neuman and Roland Cavanagh explain in their book, "TheSix Sigma Way," Six Sigma training should eventually become part of basicbusiness leadership skills for the organization. As with other types ofleadership development, it would typically not be compensated. Interestinglyenough, there is not one reference in their book about paying people toparticipate in six sigma training and/or become black belts, or even sharinggains with employees. The book, by the way, is a good primer to learn more aboutSix Sigma and what it really means for your organization.

SOURCE: Robert Fulton, managing director, The Pathfinder's Group,Inc., anaffiliate of The Chatfield Group, Chicago, Illinois, Oct. 22, 2002.

LEARN MORE: Read GE Brings Skills toLife.

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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