Section 4.7. 7. Promote Performance Incentives

4.7. 7. Promote Performance Incentives

In the business world, people are compensated for doing a job. They are often rewarded for doing the job well. These basic performance assumptions can be carried directly into your process program.

Chapter 3 established some general process program guidelines: identify business objectives, design processes to support these business objectives, and create activities within the processes to guide business activities. If you have done that, you have helped create a way for your people to do business in your organization. In fact, it should be the preferred way of doing business. Therefore, if the business is important and if your process program guides business activities, it should be important to your organization that your people become proficient in your process program.

The idea here is that if your people follow the program, they should be able to perform well in their jobs. In fact, process compliance should be seen as part of their job. And when they prove that they are able to work efficiently within your program using processes and procedures to get work done, they may well deserve to be rewarded.

Linking process proficiency with job performance evaluations is a good way to sustain process improvement across the organization. Following are four techniques that you can apply as a way to create performance incentives that encourage people to adopt and use the process program in place for your business units.

4.7.1. Link Performance Objectives to Program Components

Your process program, taken as a whole, may be a big thing, and its full scope may reach outside of most people's day-to-day activities. However, people have specific jobs to do, specific contributions to make, and so they should be familiar with those parts of the program that impact their business views. These areas should beat some levelrepresented in the program.

To foster compliance and the ongoing use of the program, then, part of management's jobpart of their own business viewshould be to link the employee's performance with proficiency in those program elements.

To do this, up front and early on, you can work with your people to establish these relationships and then use the traditional MBO (management by objectives) techniques of defining goals and then defining a path to achieve them. In this case, one objective could be to learn and use the program as part of overall job responsibilities. MBO is a technique that can help set a host of performance goals: increase revenues by three percent, reduce downtime to half a day per quarter, meet installation commitments 98 percent of the time. Those examples all have to do with job action. Other examples, those related to your process program, could be tied to job knowledge and job proficiency: train at least three new employees in our up-time maintenance procedures every month, participate in three process improvement committee sessions each year, attend two process program refresher courses. By setting these kinds of objectives, you begin to link business performance objectives to process program proficiency.

This will serve as a common yardstick you and your people can use to measure not only your increased knowledge and use of the program, but also to monitor overall organizational commitment to sustained process improvement.

4.7.2. Tie Performance Reviews to Program Proficiency

When you manage your teams, in part by setting them with objectives that stress process program integration, you should naturally expect them to work to achieve those objectives. And because you have made these objectives a tangible and measurable part of job performance, you should make sure that their work toward accomplishing these objectives is recognized in performance reviews.

In many organizations, job reviews and performance appraisals are handled as little more than chat sessions. They run as casual conversations that dip in and out of performance assessment topics. In other organizations, reviews and appraisals are structured along much more formalized lines. Whatever path your organization takes, it's important to remember the commitments you share with your people, especially (for the focus of this book) those that deal with process proficiency. Bring these commitments up at reviews and appraisals and discuss them. For those people you feel have met or exceeded their process performance objectives, ensure that you can reward them in an appropriate manner.

4.7.2.1. Establish formal rewards

Because an organization's process program should reflect the way it conducts business, the program should be officially viewed as a core business essential. From the perspective of human-resource management, process performance should therefore be officially tied to compensation. Salaries, benefits, bonuses, and perks should in some way be a reflection of that person's ability and experience working within the program, as well as that person's ability or potential to refine, improve, or promote the program.

You can move a long way toward sustaining process improvement activities in your organization when your people begin to understand that their levels of compensation are directly linked to the level at which they embrace the program. This should probably be an early consideration in the development of the program. It's a good idea to work with your management to define the importance of process as a strategic initiative and then seek their buy-in to include process allegiance as part of performance reviews and personnel appraisals.

4.7.2.2. Establish informal rewards

You need not wait for annual or semiannual performance reviews in order to recognize achievement. You can use informal awards spread out over time that let people know you are following their progress and are recognizing the work they are doing. Actually, I have found that informal awards sometimes have more impact the formal ones. I have seen managers give people what I call "visible thank-yous" that really reinforce commitment and promote enthusiasm. Things like a dinner out on the town, tickets to theater or sporting events, special plaques, team lunches, or even success banners all provide a visible show of support to members of the organization. They are valuable reminders that the process program is important, and that the people who help it succeed, even in little ways, are sincerely appreciated.

View from the Top

SUCCESS BUILDS ON SUCCESS

"There's great value in interpreting, selecting, and internalizing those portions of CMMI, ISO, and Six Sigma that line up with your needs. The key is to take these parts and then shape them to fit the organization.

"A common idea is to apply process improvement to those areas in an organization that have the most problems, or substantially lack process. But an approach that's often better is to focus process improvement on areas in the company that have already made progress in process management. These groups will typically make the most of improvement opportunities, and you'll often see a faster ROI on their efforts. Also, they stand a strong chance of standing out as a success story in the organization. Nothing succeeds like success."

Bruce A. Brown, Senior Vice President and CIO, T-Mobile USA