Although HR is not a big department in most organizations, HR processes have a major impact on the employee's efforts for delivering services or product.
HR people handle the responsibility of retaining the employees while balancing the financial needs of the company.
Compensation and benefit areas taken care of by the HR department include payroll administration, time and attendance management, leave policy, stock options and so on. Six Sigma Projects such as reducing time for the paycheck deposition process, faster performance review systems and eligibility study for ESOPs can be considered for the betterment of these activities of the HR.
There could be a need for Six Sigma projects like improving multiple payroll systems for remote locations and reducing errors in employee information database.
HR personnel have to take care of areas like employee absenteeism, dispute resolution, health and safety issues, union negotiations, interpersonal communication and discrimination and harassment issues. Six Sigma projects can be undertaken to address the discrimination and harassment by way of monitoring and compliance audit, systems for improved communication among employees and executives
Six Sigma projects can aim at overall organizational development with regards to improvements in the career and succession planning, leadership, change management, workplace planning and organization, performance improvement and communication programs.
Staffing, Training and Retention - One basic responsibility of the HR department is staffing, background checks, selection and training and retention of employees. They have to design and schedule training and development programs for new employees, as well as existing ones.
They also have to handle employee contracts for permanent and temporary employees and manage the process of relocation and outsourcing of employees. They have to manage the retrenchment issues and exit interviews. There can be projects like creating self-learning and evaluation modules for the employees.
Projects to improve the hit rate for job postings followed by quick responses to the applicants, reduction in unnecessary security checks and so on can be undertaken by the HR department as Six Sigma projects.
Six Sigma has been around for over a decade and as such it has been deployed at lots of companies around the world. More than 75% of the fortune 500 companies have deployed Six Sigma in one form or another. Some companies have chosen not to call it Six Sigma due to copyright or other issues. They have a similar approach but may call it by a different name (such as STRIVE, MEDIC, etc).
Some of the more famous companies who are using Six Sigma are:
- General Electric
- Motorola
- Caterpillar
- Microsoft
- Home Depot
- Philips
- Allied Signal
- Xerox
- Chevron
- Dell
- WIPRO
Also, some of the major players in India using Six Sigma are:
Banking: Bank of America, American Express, HDFC, HSBC
Call Centers: ICICI OneSource, Accenture, Satyam BPO, IBM Daksh
Hospitality: ITC Hotels, GRT Hotels
Hospitals: Apollo Hospitals
Retail: Reliance Retail
Telecom: Bharti Cellular, Vodafone, Siemens
Software: Wipro, Satyam, Accenture, Infosys
Six Sigma can be applied in all industries/companies as work always takes place in processes and the following hold true for every company (in any industry).
Everything that anyone does is a part of a process. A process is efficient or inefficient depending on the output to input ratio. (this ratio could be productivity measure, cost measure, time measure or any other useful metric)
Very few processes are defect free and most have unacceptable level of defects or delays (as per industry standards, company's own philosophy towards defects or based on customer expectations). Here, for many processes there is an internal customer (instead of or in addition to an external customer).
Meeting customer (internal, external or both) expectations with reasonable cost is a key success criterion.
Variation in process inputs or improper controls result in reduced efficiency or dissatisfied customers, which increases costs and breeds further inefficiency.
Six Sigma requires that you define success criteria for key processes, eliminate defects (or reduce their severity or occurrences), and measure outcomes for exceeding industry standards or creating new benchmarks, thereby leading to competitive advantage in terms of cost or value for customers.
Many people thinkSix Sigma works for repetitive processes and has no application for projectsituations. Project situations are common in companies and functions that carryout construction, commissioning and installations, software development, plantand machinery development and manufacture, research & development etc.
Although these sectors have significant differences in challenges that theyface, the common element is that they carry out projects and each project is uniquein itself.
To understand theapplications of Six Sigma in companies that carry out projects, let us takeexample of construction industry (as most people have some familiarity withthis sector)
In construction industry, Six Sigmausage can be understood with following points:
1. Recurring problems exist at each stage of construction. When I say recurring, it means recurring for the company (may be-not for individual projects)
2. If you study a construction project, it comprises of large number of individual processes ranging from soil testing to land scaping to structural designs to foundations, superstructure, interiors and exteriors. There are a whole lot of purchase and logistic processes as well.
3. A good number of these processes are common to all projects. If processes were robust many of the individual problems would not occur at the first place. The remaining can be reduced.
4. The idea in Six Sigma is about making the processes robust ( so that the results are right the first time, every time)
5. Not all processes are equally important. Processes that matter are those that relate closely to pain areas (forcustomers/ management). These processes need improvement.
6. In each project, individual project managers,site engineers face a whole lot of problems that they solve. These problems doget solved in the project (after they have caused a delay or cost in thespecific project). Normally there is no mechanism to aggregate learning fromthe experiences of these managers and use it for process improvement. Alsocompanies do not have structured mechanism to use tried and tested techniquesto eliminate or reduce such issues in future projects.
7. To be able to study and improve managementsystems one needs a structured approach that should include
a. Identifying individual problem areas(or focus areas) and prioritizing them.
b. Next, we need techniques to identifythe root cause of the problem.
c. Once we identify the root cause, we need to generatesolution alternatives, compare them and select the best.
d. We then need to implement the bestsolution and see how it works.
e. If successful, we wish toinstitutionalize the solution.
8. SixSigma provides tried and tested techniques for steps A to E in a team basedapproach which converts each problem area into an individual "improvementproject".
9. When processes improve, there is a reductionin problems and defects.
10. Primary defects in construction industry(and most of the project driven industries) are DELAY, REWORK and COST OVERRUNSand Six Sigma can be used to reduce any of these defects.
This is not all.In addition to usage in improvements in existing processes (as explainedabove), Six Sigma is also used to design new processes (or redesign existing processes that contribute to project success (with better predictability thatever before).
HR people handle the responsibility of retaining the employees while balancing the financial needs of the company.
Compensation and benefit areas taken care of by the HR department include payroll administration, time and attendance management, leave policy, stock options and so on. Six Sigma Projects such as reducing time for the paycheck deposition process, faster performance review systems and eligibility study for ESOPs can be considered for the betterment of these activities of the HR.
There could be a need for Six Sigma projects like improving multiple payroll systems for remote locations and reducing errors in employee information database.
HR personnel have to take care of areas like employee absenteeism, dispute resolution, health and safety issues, union negotiations, interpersonal communication and discrimination and harassment issues. Six Sigma projects can be undertaken to address the discrimination and harassment by way of monitoring and compliance audit, systems for improved communication among employees and executives
Six Sigma projects can aim at overall organizational development with regards to improvements in the career and succession planning, leadership, change management, workplace planning and organization, performance improvement and communication programs.
Staffing, Training and Retention - One basic responsibility of the HR department is staffing, background checks, selection and training and retention of employees. They have to design and schedule training and development programs for new employees, as well as existing ones.
They also have to handle employee contracts for permanent and temporary employees and manage the process of relocation and outsourcing of employees. They have to manage the retrenchment issues and exit interviews. There can be projects like creating self-learning and evaluation modules for the employees.
Projects to improve the hit rate for job postings followed by quick responses to the applicants, reduction in unnecessary security checks and so on can be undertaken by the HR department as Six Sigma projects.
Six Sigma has been around for over a decade and as such it has been deployed at lots of companies around the world. More than 75% of the fortune 500 companies have deployed Six Sigma in one form or another. Some companies have chosen not to call it Six Sigma due to copyright or other issues. They have a similar approach but may call it by a different name (such as STRIVE, MEDIC, etc).
Some of the more famous companies who are using Six Sigma are:
- General Electric
- Motorola
- Caterpillar
- Microsoft
- Home Depot
- Philips
- Allied Signal
- Xerox
- Chevron
- Dell
- WIPRO
Also, some of the major players in India using Six Sigma are:
Banking: Bank of America, American Express, HDFC, HSBC
Call Centers: ICICI OneSource, Accenture, Satyam BPO, IBM Daksh
Hospitality: ITC Hotels, GRT Hotels
Hospitals: Apollo Hospitals
Retail: Reliance Retail
Telecom: Bharti Cellular, Vodafone, Siemens
Software: Wipro, Satyam, Accenture, Infosys
Six Sigma can be applied in all industries/companies as work always takes place in processes and the following hold true for every company (in any industry).
Everything that anyone does is a part of a process. A process is efficient or inefficient depending on the output to input ratio. (this ratio could be productivity measure, cost measure, time measure or any other useful metric)
Very few processes are defect free and most have unacceptable level of defects or delays (as per industry standards, company's own philosophy towards defects or based on customer expectations). Here, for many processes there is an internal customer (instead of or in addition to an external customer).
Meeting customer (internal, external or both) expectations with reasonable cost is a key success criterion.
Variation in process inputs or improper controls result in reduced efficiency or dissatisfied customers, which increases costs and breeds further inefficiency.
Six Sigma requires that you define success criteria for key processes, eliminate defects (or reduce their severity or occurrences), and measure outcomes for exceeding industry standards or creating new benchmarks, thereby leading to competitive advantage in terms of cost or value for customers.
Many people thinkSix Sigma works for repetitive processes and has no application for projectsituations. Project situations are common in companies and functions that carryout construction, commissioning and installations, software development, plantand machinery development and manufacture, research & development etc.
Although these sectors have significant differences in challenges that theyface, the common element is that they carry out projects and each project is uniquein itself.
To understand theapplications of Six Sigma in companies that carry out projects, let us takeexample of construction industry (as most people have some familiarity withthis sector)
In construction industry, Six Sigmausage can be understood with following points:
1. Recurring problems exist at each stage of construction. When I say recurring, it means recurring for the company (may be-not for individual projects)
2. If you study a construction project, it comprises of large number of individual processes ranging from soil testing to land scaping to structural designs to foundations, superstructure, interiors and exteriors. There are a whole lot of purchase and logistic processes as well.
3. A good number of these processes are common to all projects. If processes were robust many of the individual problems would not occur at the first place. The remaining can be reduced.
4. The idea in Six Sigma is about making the processes robust ( so that the results are right the first time, every time)
5. Not all processes are equally important. Processes that matter are those that relate closely to pain areas (forcustomers/ management). These processes need improvement.
6. In each project, individual project managers,site engineers face a whole lot of problems that they solve. These problems doget solved in the project (after they have caused a delay or cost in thespecific project). Normally there is no mechanism to aggregate learning fromthe experiences of these managers and use it for process improvement. Alsocompanies do not have structured mechanism to use tried and tested techniquesto eliminate or reduce such issues in future projects.
7. To be able to study and improve managementsystems one needs a structured approach that should include
a. Identifying individual problem areas(or focus areas) and prioritizing them.
b. Next, we need techniques to identifythe root cause of the problem.
c. Once we identify the root cause, we need to generatesolution alternatives, compare them and select the best.
d. We then need to implement the bestsolution and see how it works.
e. If successful, we wish toinstitutionalize the solution.
8. SixSigma provides tried and tested techniques for steps A to E in a team basedapproach which converts each problem area into an individual "improvementproject".
9. When processes improve, there is a reductionin problems and defects.
10. Primary defects in construction industry(and most of the project driven industries) are DELAY, REWORK and COST OVERRUNSand Six Sigma can be used to reduce any of these defects.
This is not all.In addition to usage in improvements in existing processes (as explainedabove), Six Sigma is also used to design new processes (or redesign existing processes that contribute to project success (with better predictability thatever before).
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