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Best Practice Reward Systems

Six Sigma – iSixSigma Forums Old Forums General Best Practice Reward Systems

This topic contains 20 replies, has 10 voices, and was last updated by  Mike Carnell 10 years, 8 months ago.

Viewing 21 posts - 1 through 21 (of 21 total)
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  • #42158

    Cook
    Participant

    I did a search on this site on “reward systems” and came up with only 4 hits that weren’t of much value. 
    There are a lot of people laboring hard to improve processes in their organization but there seem to be barriers to creative solutions, timely completion of projects, thorough searching for root causes, comittment of resources to projects, sustained results, effective project selection, clear project definitions, etc.
    I believe that rewards are often a missing piece of the puzzle. So my question is, “what best practices have you seen where reward systems help drive continuous improvement?”  If you respond, please also include why you feel the practices was particularly effective.
    Dana
     
     

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    #180697

    SandMan
    Member

    50% – 100% of salary depending upon milestones achieved. This was for projects in excess of $1MM annual savings or cost avoidance.
    or, agreed percentage of annual savings distributed to the team with unlimited potential.
    $100 cash rewarded to shop floor personnel that identified cost or o/p savings in excess of $1000

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    #180699

    Devo
    Participant

    HI Dana,
    In my organization (service based) I am the one responsible to drive the continuous improvements, but each person in operations is graded by a set of metrics that I provide to them. The reward they get is up to 7% bonus of their annual salary if they cross certain metric thresholds. So, they get graded on their individual files, by having to send out certain things w/in a specific timeframe, filling in all fields, etc.
    They also get graded by customer feedback scores. They must cross 90% satisfaction to even begin to get bonused on that portion.
    There are many things involved in the calculation, however through constant training on the metrics I have begun to see an improvement. As the grades/scores go up, so goes the bonus % increase. Now that they have seen that they can improve their scores, they are trying harder. I think the main ingredient that is driving this improvement is instruction and constant repetition of the metrics. They now see that the improvement is attainable and they are not disheartened as in the past. They don’t understand the formula for the bonus percentage, but they now understand the metrics and what has to be attained, and it has helped the attitude tremendously.
    I hope that helps. :)
    Cheers,
    Devo

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    #180700

    Nolan
    Participant

    Wow, Sandman, no wonder we’re going broke – 50 to 100% bonus for doing your job?
    My max bonus at mid-level mngt was 30% in a record year.

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    #180713

    Taguchi
    Member

    In the Japanese culture the best reward is to give a cup of tea (by hand!)

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    #180716

    Cook
    Participant

    Thanks.  And to anyone else participating in this thread, I’m especially interested in hearing the non-financial rewards that work.  Not because I’m cheap.  Just that I think they can be very effective.

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    #180717

    Taguchi
    Member

    Totally agree

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    #180733

    CT
    Participant

    To reward teams bring in Pizza’s for lunch works well. Everyone feels good about being fed they get up and talk to each other.
    On individuals one of the rewards which gave the best feedback was half days or full days off.

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    #180750

    Angi Lee
    Participant

    Hi Dana, I began managing Six Sigma for an area of the company that was not bought in, but had a lot of great talent.  One thing that worked to increase engagement was as employees received their Green or Yellow certifications, I would distribute an email congratulating them and copying everyone up and down the food chain in the business area, this included the VP and SR VP (this was prearranged).  When they saw the emails from me, the VP and/or SR VP would reply to all, which was everyone on my distribution with a statement like “Great job, great project, thank you ” 
    That went a long way, suddenly I was inundated with requests for assistance to move from non-trained to certification.
    Free solution coupled with a very nice employee recognition element!

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    #180761

    Mario Perez-Wilson
    Participant

    When we started the Six Sigma initiative at Motorola, there was no reward system for completing improvement projects. Improving processes, improving products, improving customer services (customer satisfaction) was part of everbody’s job. We made it be part of the corporate CULTURE.Mario Perez-Wilson
    http://www.mpcps.com

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    #180765

    Taguchi
    Member

    Some managers are using the word “great” for every performance!
    Saying “well-done” in a certain meeting can be effective!

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    #180768

    SandMan
    Member

    re: recognition of efforts / free stuff…Any good management team and leader should be constantly doing this in various ways. Event the small steps up to a yellow or green belt needs to be recognized too.These “thank you’s” and “well done’s” work well as long as they are consistent across sites and organizations and are communicated correctly and promptly. Be wary though, having the same email as a cut and paste response each time get’s old quick…Also, adding in peer recognition for jobs well done works well too. Having a posting board on the production floor where other employees can recognize (post) good work of others for all to see (rather than in a private email), encourages team work. Home Depot uses something similar to this. Look near the employee break room entrance in most stores and you might find a lot of useful SS, Lean and other recognition ‘tools’ being used. (forgive the pun). This may work well where teams have advanced the culture and are working well together.

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    #180769

    Nolan
    Participant

    Oh yeah, Taguchi saying “Well done” instead of “Great”; that’ll work. What insight.

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    #180771

    SandMan
    Member

    I was thinking “Super job” might also be effective… :oPSeriously, most recognition works when delivered well, however you say it. Just say it, but be sincere.

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    #180817

    Obiwan
    Participant

    Dana
    For reward systems…it all boils down to $$$.  They may come in different forms (lunch, time off, etc.), but it is still about dollars.  That is the essence of “reward.”
    Recognition…now that is a whole other ball game and it can be very effective.  As others have suggested, recognizing associates to senior managers or at gatherings works well.  But…NEVER underestimate the value of a good old-fashioned hand written note.  As I have a little hobby of writing Haiku poetry, I attempt to put a Haiku into the hand written note.  That makes it VERY personal and directly at them!
    Pose a question on
    Reward and recognition,
    Get good discussion.
    So…there is your Haiku for a good question…
    Obi

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    #180965

    SandMan
    Member

    It’s relative… you probably related the 100% to your large pay and thought that it was outrageous…perhaps your 30% bonus was huge…?

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    #180970

    SandMan
    Member

    Get creative…
    We post things that work in our environments and cultures… only you know what would work in yours. Searching Google will yield lots of ideas on this subject, just look for “how to be a good manager”, but a good incentive or reward can damage the morale or culture if presented at the wrong time or in the wrong way. Are you rewarding teams or individuals, reward to goal or progress, reward above and beyond or struggling but delivering…?Perhaps you could ask your workers/team members what they would like… as they are the ones that would receive the recognition… right? VOC.Too many teams celebrate with pizza. Look at ways that your team performed well and ways / areas that they could improve. You are bringing new tools to the work floor, you really could look at new ways of recognizing too.Good luck.

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    #180971

    Taguchi
    Member

    Matsushita in his book “people before products”suggested many ideas to motivate people,some of those ideas;commitment,transparant management,inspired leadership,responsible decision making,strength in admitting weakness,,someone to listen,etc.

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    #180973

    Mike Carnell
    Participant

    Dana,
    You are going to get the infamous “it depends” answer. You need to match the culture of the company. Like Mario I came out of the Motorola system where there were not project level rewards. Motrola paid a thing called Return On Net Assets (RONA) but it didn’t pay often and when it did it didn’t pay much. That was the Motorola culture prior to Six Sigma so if we would have rolled in with some bonus plan then we would have basically isolated the program because it would have been out of step with the culture or there is the possibility everyone would have stopped other initiatives (nobody seems to want to mention we did more than SS) and worked the bonus. That would have alienated the people running the other programs.
    If you want a successful bonus plan and a successful deployment then it needs to blend with the culture as it exists.
    If you want to change it, blend it first and them change them all.
    Just my opinion.

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    #180978

    Nolan
    Participant

    That’s an excellent answer Mike. One must measure what will inspire the behavior sought without disrupting the behavior sought. Tricky stuff…because people are complex animals.

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    #180980

    Mike Carnell
    Participant

    Thank you.

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