Lean Six Sigma application in Human Resources
A company pays its workers both fixed and variable pay. The company pays minimum wages to its workers as per Government rules. The variable pay to workers is based on their performance. If a worker produces more than the set target, she is eligible for incentive payment. The incentive amount proportionate to the number of units she produced more than the target. Are the workers earning incentives? Are all of them earning incentives? How many workers earn incentives?
How is incentive distributed among the employees?
Use Pareto analysis.
50% of incentives is earned by 28 out of 196 operators! 14% of the workers earn 50% of incentives.
More workers should earn incentives! These workers (14%) are the role models for other workers (around the tail of the graph) to strive and achieve more. HR department should brainstorm with production department to develop an effective plan improve the workers (around the tail of the graph) skill to enable them earn more than what they are earning.
Can the incentives be more uniformly distributed? May be yes, but it needs a good planning and execution.