Can Six Sigma be used in HR?…… YES it can!

Let’s indulge in a fairly new topic today. One that has a hint of controversy attached to it. Its about Six Sigma and its applicability.

Your first question must be…OK what is Six Sigma? Well its a methodology that measures quality by eliminating defects and striving for perfection. On one website is was explained as “The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects.”

Initially its use was limited to the manufacturing industry.Its rise to fame was about 20 years ago when Jack Welch, the CEO of General Electric, used this method to hamper losses due to rising competition from Asia in the electronics market . It is statistical in nature and is a management technique that seeks to drive defects to less than 3.4 defects per million. Defects are defined as any non-conformance to customer specifications. Once the causes of defects are identified, processes are modified to avoid the causes. It implies a customer driven approach where as the the customers may be internal or external.

The implementation is through a process called DMAIC ( Define, Measure ,Analyze, Improve, Control)

The DMAIC project methodology has five phases:

1. Define the problem, the voice of the customer, and the project goals, specifically.

2. Measure key aspects of the current process and collect relevant data.

3. Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under investigation.

4. Improve or optimize the current process based upon data analysis using techniques such as design of experiments, poka yoke or mistake proofing, and standard work to create a new, future state process.

5. Control the future state process to ensure that any deviations from target are corrected before they result in defects. Implement control systems such as statistical process control, production boards , visual workplaces, and continuously monitor the process.

How does an organization know if it is ready for Six Sigma?

It is pertinent to mention one more vital factor that will ensure the success of implementing Six Sigma in any organization, and that is the ‘readiness’ of the organization. There has to be willingness to change, a healthy atmosphere of self-criticism, and a decentralized organization that has a flat structure and decision making at all levels. The company should consider employees as an important resource, reward intelligence, encourage initiatives  and creativity and be involved in rigorous strategic planning. The  organization must be focused on ROI . It must have the ability to statistically measure client satisfaction, market share, cost, and productivity. Companies that are not ready for Six Sigma are those that tend to be resistant to change, have a blame mentality, a low appreciation of staff, the inability to dedicate project resources, and a rigid, hierarchical organization structure.

This all means that six sigma is not magic. You cant expect to succeed unless you have all the ground work done first.It takes a lot of effort to move Six Sigma through an organization.We should pay attention to lessons learned in the 1980s, when “TQM [total quality management] activities were a failure” because “90 percent of the employees in the company were disconnected from it.

What companies do is that they hire trained experts and expect them to implement projects without a corporate culture change. Sorry ,but that will only result into a complete waste of time and money.

An organization must have an environment and corporate culture that is conducive to change and innovation. Employees should be ready to take on the challenge and prepared in advance. They must be taken into account and involved in the transition every step of the way so that they feel that they are a part of it all and will be contributing to its success. You cant expect it to work in a place where every other employee is going to stand up and create resistance saying that “Why should we change the way we work? ” or “but it’s always been done like that here!!” This is why it has to be initiated, managed and monitored by the top management.Leading and sustaining that change is the role of executives. “It’s the leadership that has to drive this, that has to put it in performance expectations, put it in goals.

WHY IS SIX SIGMA IMPORTANT?

Six Sigma measures variability and aids companies in improving overall quality. It is fact-based and data driven and is executed on a project basis before it is applied throughout the organization. This management system achieves sustainable competitive advantage by providing a set of tools for improvement efforts to eliminate defects for its users. Six Sigma is a highly customer-focused program-management listens to the voice of the customer to find out what is important and captures what he wants. The program defines a structured way for businesses to solve problems. Users of Six Sigma try to pinpoint which elements of service delivery are critical to overall quality. One of the keys to Six Sigma is breaking down processes into manageable pieces and improving each piece to affect the overall performance.

Is it possible to use the Six Sigma Concept in Human Resource to effectively cope up with the HR related issues?

The answer is yes. As a matter of fact it is highly advisable that this method be implemented across the organization.  But it can not be done without total involvement and commitment from the employees.

As with any major organizational initiative, many factors contribute to success. Some of these factors will fall within HR’s area of responsibility.Therefore it is the job of the HR department to make sure that the corporate culture is molded in a way that it can accommodate this type of change. The HR policies and procedure should reflect this and make sure that all properly qualified persons are designated and in place to ensure the implementation is successful.

So the first job of HR is to prepare the organization for implementation. The second is that Six Sigma can help HR in all its functional areas and improve its working and results.

The following points will help to explain which areas specifically related to the HR function can benefit:

o Reduce the time required to hire an employee.
o Improve employee orientation processes.
o Reduce expenditures for Recruitment.
o Improve timeliness and the value of employee performance reviews.
o Reduce absenteeism.
o Improve training efficiency.
o Improve employee satisfaction.
o Identify and correct retention issues.
o Reduce Incentive Compensation errors.
o Eliminate Over payments to Terminated Salaried Employees.
o Improving grievance handling process.
o Consolidation of employee information databases.
o Integration of multiple payroll systems for remote locations.
o Increase job posting hit rate.
o Increase retention using exit interview information….and many many more!

So now I hope this was able to help you better understand Six Sigma and its scope.