Oriel Six Sigma Retention and Compensation Survey

2004 Oriel Six Sigma Retention and 2004 Oriel Six Sigma Retention and Compensation SurveyCompensation Survey

November 1, 2004

Stephen Villaescusa

@2004 Oriel Incorporated. All Rights Reserved. 2

Outline

• Background, Objectives and Methodology

• Respondent Profiles

• Recruitment and Selection

• Training

• Certification

• Appraisals

• Compensation

• Career Path

• Turnover


Survey Background

• January 03 Oriel invited to speak at Six Sigma Best Practices Conference on compensation issues

• February 03 We drafted a survey with input from our consultants and client companies 15 companies participated

• Presented Salary Survey at several best practices conferences in 2003

• May – June 04 Survey sent to 35 Six Sigma practitioners, 18 completed and returned

• June 04 Compiled and analyzed data• Presented findings at many conferences in 2004


Survey Objectives

• Determine key issues in identifying and recruiting Six Sigma Black Belts and Master Black Belts

• Identify how companies are approaching Six Sigma certification

• Investigate whether retention is a critical issue • Review what compensations strategies are being

used• Understand critical success factors


Methodology

• Survey questionnaire—33 questions• Companies contacted—32 • Number of respondents—18 companies• Response Rate—51%


Methodology

• Respondents may define Master Black Belt, Black Belt, and Green Belt positions differently

• Survey responses were taken literally

• Respondent confidentiality was carefully protected

• Average GB, BB, and MBB salaries were compiled in ranges

• Some of the verbatims in this presentation were shortened for the benefit of the reader. The meaning was not altered.

Respondent ProfilesRespondent Profiles


Company Size by Number of Employees

a) Less than 1,000 (2)

b) 1,000–5,000 (4)

c) 5,001–10,000 (2)

d) 10,001–25,000 (2)

e) 25,001–50,000 (3)

f) 50,001–100,000 (3)

g) 100,000+ (2)

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Employees


How Many Employees Does Your Organization Have?

• Broad range of participation • Companies ranged from as small as less than 100 to as large as over 100,000 employees


What Industry Best Describes the Primary Function of Your Organization?

Financial Services (2)

Aerospace (2)

Manufacturing (2)

Health Care (3)

Retail (1)

IT (1)

Energy (1)

Paper (1)

Pharmaceutical (1)

Beverages (1)

Building Products (1)

Chemical (1)

Hospitality & Services (1)


Is Your Organization Global?

Yes (61%)

No (39%)

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GlobalDomestic


How Many at Your Organization?

Master Black Belt• Full-time Range 0–350 (16 of 18 organizations)• Part-time Range 0–6 (4 of 18 organizations)

Black Belt• Full-time Range 2–100 (18 of 17 organizations)• Part-time Range 0–200 (6 of 17 organizations)

Green Belt• Full-time Range 0–40 (4 of 18 organizations)• Part-time Range 0–1,000 (14 of 18 organizations)


Of the Current Black Belts, How Many Are Certified?

Full-time (56%)• Range 0–100

• 14 of 18 organizations

Part-time (75%)• Range 0–200

• 7 of 18 organizations6870727476788082848688

Full-time

Part-time

Black Belts


How Many Six Sigma Projects Has Your Organization Completed?

1–20 (22%)

20–50 (28%)

50–100 (17%)

100+ (33%)

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20-5

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ProjectsCompleted


What Is the Average Time to Complete a Black Belt Project in Your Organization?

1–3 Months (0%)

4–6 Months (44%)

6–9 Months (50%)

10–12 Months (6%)

1+ Year (0%)

Don’t know (0%) 0

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1-3

4-6

6-9

10-1

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12+ ?

Time


How Would You Assess Your Company’s Experience With Six Sigma?

a) Very dissatisfied (0%)

b) Dissatisfied (6%)

c) Neutral (17%)

d) Satisfied (50%)

e) Very satisfied (27%)

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a b c d e

Experience


What Is Your Role at the Organization?

• Vice President (28%)• Director (38%)• Six Sigma Leader (22%)• MBB ( 6%)• Compensation ( 6%)

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VPDirectorLeaderMBBComp


Can We List the Name of Your Company As a Survey Participant?

Yes (78%)

No (22%)

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Yes No

Co. Name


Can We List the Name of Your Company As a Survey Participant?

• Bank of America

• Blue Linx

• Blue Ridge Paper

• Coca Cola

• Federated

• Ingram Micro

• Manitowoc Company

• Mt. Carmel Health System

• Northrup Grumman

• Ortho Biotech

• The Boeing Company

• Via Systems

• Boston Scientific

Recruitment and SelectionRecruitment and Selection


Current Six Sigma Job Openings

• 17 of 18 companies had openings

• Master Black Belt• Full time openings 0-75

• Part time openings 0

• Black Belt• Full time openings 0-25

• Part time openings 0-100

• Green Belt• Full time openings 0-10

• Part time openings 0-200


Top Three Qualities in a Black Belt Candidate

a) Quality of workb) Leadership skillsc) Teamwork, “Good with

people”d) Experiencee) Trainingf) Technical/Analytical skillsg) Quality experienceh) Organized and thoroughi) Other—please specify:

Change Leadership, Project Management Experience, Communication skills

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a b c d e f g h I

Qualities

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External CandidatesExternal Candidates


Do You Recruit Black Belts Externally?

Yes (44%)

No (56%)

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Yes No

Recruit


What Percentage of Your Black Belts Are Hired Externally?

0 (47%)

1–10% (20%)

11–25% (13%)

26–50% (13%)

50% + (7%)

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11-25

26-50

50+

External %


What Are the Key Criteria in the External Selection Process?

• Prior experience, certification, demonstrated results of the methodology and "heart."

• Experience and background

• Industry experience

• Manufacturing experience

• Leadership skills, change agent, exceptional communicator

• Ability to implement solutions, works well cross functionally, see the big picture, innovative

• Training completed by a recognized training source, evidence of project success which is part of the interview process. Match with the organization culturally

• Relevant experience


What Are the Key Criteria in the External Selection Process?

• Team leadership skills and demonstration, ability to push issues up the ladder if needed, presentation, some technical skills, healthcare background is helpful but not essential, project completion examples

• No BBs hired externally - we hire MBBs externally. Key criteria for MBBs are high energy, 3 years hands on experience, BB experience, MBB certification, BS degree, 9 years work experience.


What Problems, If Any, Have You Experienced in Identifying External Candidates?

• Budget dollars and headcount

• Wages are too high, volatile market, broad range of definition around skills sets & certification

• Familiarizing candidates with the Healthcare industry when they have not had this experience has been the major obstacle.

• Too many with false credentials

• For MBBs - who are hired externally we find great variability in Six Sigma skills; not enough understanding of Six Sigma - it's more than the statistics; candidates like to work in a structured environment where Six Sigma is a top down mandate

• We must show big wins before the company will buy in to more BB's


Internal CandidatesInternal Candidates


How Are Internal Black Belts Candidates Identified?

• Senior Management• High potential, manager and

above• Manager nomination• Strong GB capabilities; high

potential employees• We have developed a BB

skills & competency document Supervisors can use to nominate a BB candidate for consideration. Working with the enterprise BPI team a go/no go decision is made.

• Internal Black Belts can be selected by department leaders or through self-nomination.

• High potential program managers

• High potentials selected by unit management

• Management potential



• Each VP nominates a set of candidates for the role - slots open up every six months. We gather details on past performance, raise and promotion history. We go back 3 years. An internal preselection gathered from existing Black Belts, Black Belts who have rotated out of the program and all Master Black Belts. A small selection team then decides if we will offer an interview or turn the candidate down. All candidates who make it thus far are interviewed by the selection team and a recommendation on - Hire / Not Hire is made to the VP of Six Sigma who then endorses or questions the recommendation. For the few who are selected an offer is made.



• The original 2 waves were selected by the Vice President (Champion) role and nominated for the position. Since that point we have established a minimum requirement for application as being trained as GB. Then subsequent application and interview process is conducted with the Master Black Belt, Champion and Black Belt peers.


What Problems, If Any, Have You Experienced in Identifying Internal Candidates?

• Getting the word out through the company in a way that is fair, consistent and inclusive

• Fear of being outside the organizational structure

• Some managers are reluctant to give up key employees when they can't replace them

• Lack of interest due to lack of knowledge of the job, making a leap of faith and trusting in the system, some lack of support from within

• Interest in becoming a BB resource, lack of technical skills, corporate infrastructure to support the role.

• Cannibalization of top resources, lack of expertise.

• Consistent criteria across business units (some departments do not apply the criteria as strictly as others)


What Problems, If Any, Have You Experienced in Identifying Internal Candidates?

• Early waves 1 and 2, we probably over emphasized the technical and analytical skills to the detriment of the project management and change leadership skills. This brought us individuals who enjoyed the analysis but the project scope and timeline creep became obvious barriers in their work

• For BBs - who are hired internally the biggest problem experienced is the time they can commit to Six Sigma work

• Lack of time.


Process IntegrityProcess Integrity


What Do You Do to Ensure the Integrity of the Selection Process?

• The process is documented, followed and key metrics are tracked to ensure fairness.

• The selection team make up is diversified to ensure integrity. It has a HR person, a Master Black Belt and two existing Black Belts.

• Behavioral interviewing by a selected panel

• Multidisciplinary interview team

• Monitor and manage it through a select group of individuals

• Interviews, testing and case study

• Personally interview candidates

• We give a test for BB and MBB skills, there is also a project review and an interview.

• Reference checks

• Verify certification



• Have clear documented requirements; work with recruiters who understand our needs; have a good documented hiring process; candidates are interviewed by two separate teams; all involved with the selection process have gone through a two day training program; standard questionnaires are used during the interview sessions and the documentation is maintained; the teams holds a facilitated debrief session after the interviews; candidate with best score are invited for a second interview; select candidates for 2nd interview are assessed for technical skills, leadership presence and presentation skills.



• We use behavioral interviewing technique with a scoring grid criteria. The questions are linked to key attributes of the desired candidate. We do however include dialogue with the interview panel as each person may have a different perspective on the response of the candidate which may need to be further explored. We may create specific interview questions for a team which is looking for a specific attribute to complement the skills of the existing belts. This question is prepared and included in the process for all applicants.


What Has Worked Well for Your Company With Regard to Identifying Candidates?

• Seeking out candidates who are high achievers and asking them to apply

• Leadership and Executive knowledge of the individuals performance and capabilities

• VP nominations - they have "skin in the game"

• Support of upper management• Extensive publication of Six

Sigma as a completely new business process including the associated cultural change

• Internet posting and referrals

• Leadership and Executive knowledge of the individuals performance and capabilities

• Having strong leadership buy-in. Also, some of our Black Belts were originally Green Belts, allowing them to exhibit their skills prior to becoming Black Belts.

• Green Belts develop into BB role


What Has Worked Well for Your Company With Regard to Identifying Candidates?

• As we have matured in our deployment, we have adjusted to identify the candidate who possesses they key qualities of all aspects of the job.

• Following the process

• Interview panel with MBB's on it.

TrainingTraining


What Factors Do You Consider As Contributing to a Successful Black Belt? (Distribute 100 Points)

(1st) Project to work on during training

(2nd) Clear expectations(3nd) Project coaching (4th) Leading change(5th) Quality on instructors (6th) Emphasis on methodology

and tools(7th) Previous experience(8th) Class peer support (9th) Other—please specify

Leadership support, Mentoring, Toll gate reviews, Time to refine skills, Right projects

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101214161820

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ContributingFactors


At Your Company, Do Black Belts Train Green Belts?

Yes (56%)

No (44%)

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Yes No

BB TrainGB

CertificationCertification


Describe the Process for Certification

• Certification test, complete 2 projects and 2 projects a year thereafter

• Complete min of 2 BB projects with annual savings of $250K

• Attend 3 weeks of training and successfully complete two projects

• External - prior companies, Internal - company university

• Various sources: previous companies, ASQ

• Certified by training company

• Training company's certification guidelines with our internal expectations. Must pass all 4 exams with a 75% or greater, complete 2 DMAIC projects with final report review by the Six Sigma Leader.

• Training plus completion of a $250k project



• Internal certification process requires 6 weeks of training, completion of at least 1 project, mentoring 5 GB projects, passing an oral exam on statistical concepts administered by MBBs, Demonstrated use of DMAIC, Summarize learning's with with Six Sigma Team, 1on1 meeting with executive sponsor to showcase readiness to be certified. Certification award is given at formal luncheon attended by Sector President and direct reports.



• A Master Black belt must complete the exams with 90% or better, complete the two projects, attend four additional weeks of advanced training, be checked off on classroom teaching and publish or speak nationally on a Six Sigma topic.

• As part of their 2-year rotation through the Six Sigma Core group, individuals are expected to leave the group as Black Belt trained at the minimum.

AppraisalsAppraisals


How Do You Appraise Black Belt Performance?

• Same appraisal process as other employees

• Standard performance appraisal form

• Project completion, evaluations from the team, evaluations from MBB's and other criteria related to job descriptions

• Detailed competency evaluation annually

• PDP (Performance Development Process)

• Both the Master Black Belt and the Champion complete an assessment on the Black Belt's performance at the completion of each project.

• Performance is appraised twice a year. This is based on input from the Black Belt, Master Black Belts, Teams the Black Belt has interacted with, tangible results delivered over the time period and assessment of how the person strives to make the team successful as a whole


How Do You Appraise Black Belt Performance?

• Project completion, evaluations from the team, evaluations from MBB's, other criteria related to job descriptions

• Yearly objective attainment

• BB report into their organization - we provide feedback to manager on performance

• Company's evaluation process

• 60% Business Results, 40% Personal goals - includes number of projects completed

• Evaluation template addresses the major competencies and expectations of the position. Candidates are eligible for the variable compensation program based on org. goal attainment.

CompensationCompensation


What Are the Average Base Salary Ranges for Green Belts?

a) $40–60,000 (22%)

b) $60–75,000 (30%)

c) $75–90,000 (17%)

d) $90–105,000 (9%)

e) $105–120,000 (9%)

f) $120,000+ (13%)

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BaseSalary


What Are the Average Base Salary Ranges for Black Belts?

a) $40–60,000 (7%)

b) $60–75,000 (15%)

c) $75–90,000 (45%)

d) $90–105,000 (19%)

e) $105–120,000 (7%)

f) $120,000+ (7%)

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BaseSalary


What Are the Average Base Salary Ranges for Master Black Belts?

a) $40–60,000 (5%)

b) $60–75,000 (5%)

c) $75–90,000 (5%)

d) $90–105,000 (38%)

e) $105–120,000 (28%)

f) $120,000+ (19%)

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BaseSalary


Are Black Belts Compensated Differently Than Other Employees? If Yes, How So?

Yes (50%)

No (50%)

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Yes No

CompensationDifferent


Are Black Belts Compensated Differently Than Other Employees? If Yes, How So?

• Black Belt receives a 5-15% temporary increase which becomes permanent when BB is certified

• Yes, but not by much -- slightly higher raise pool than the sector as a whole

• Stock options• Yes, project management =

higher salary & job grade• Special bonus for sustaining

the gains • Additional incentives

• Yes, we have a labor grade guideline but it has a very large range and has no peak or cap to the upper limit. This allows the candidate to enter the position without a negative impact to their base.All Black Belts are eligible for variable compensation program which is based on goal achievement plan. Many of the candidates were in this program prior to entering their role but some were not, so this was an enhancement.


Do You Provide Black Belts With:

• Salary increases (15)• Promotions (14)• Bonuses (14)• Stock options (7)• Retention bonuses (2)• Other—specify

Laptops, Palms, Spot awards

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Yes No

SalaryIncrease

Promotions

Bonuses

StockOptions

RetentionBonus

Other


What Kind of Incentive Program for Black Belts Does Your Company Have?

• It is based on the skill set and its applicability to other positions. If the performance is there the opportunity for the individual will come. No additional special incentives exist

• Same as for other employees

• EVA based

• Regional & Global Awards of Excellence

• Management incentive bonus depends on meeting goals and objectives. Generally 20% of base salary.

• The incentive is not a direct monetary benefit during the duration of the assignment. It is the ability to work on projects that have an enterprise impact; opportunity to showcase your skills as a cross-functional leader; and interaction with the senior mgt team and many people throughout the enterprise.


What Kind of Incentive Program for Black Belts Does Your Company Have?

• Our top level Variable Compensation program is paid to eligible candidates not just the belts, has multiple variables one is the overall financial savings generated by Six Sigma projects. This impacts Net Operating Margin as well. Our program has had an element of Six Sigma savings since the inception. In the first year we had a variable related to identification and sources of the full time black belt candidates.

• We have no incentive program specifically aimed toward Black Belts. For those Black Belts who are already bonus-eligible, they receive an annual bonus and stock options based on overall company results.


What are incentives based on at your organization?

a) Tied to results

(78%)

b) Based on cost-savings

(33%)

c) Based on project completion

(33%)0

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Incentives


How Often Do You Review Compensation Packages and Incentives?

• Annually for most companies• The HR organization does a review on a annual

basis to determine and ensure competitiveness.• Semi-annually• 1-2 times a year

Career PathCareer Path


Is the Black Belt Position Used As a High-Potential, Rotational Assignment?

Yes (89%)

No ( 11%)

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Assignment


Describe the Thinking Behind the Black Belt Career Path at Your Organization

• Two year rotational assignment with high visibility potential

• High potential candidates are selected. After completion of 2 years in Six Sigma the expectations are that successful BB's will be promoted to available positions within the company.

• The Black Belt Program is the premier high potential, rotational assignment in the sector

• It is considered a high potential , rotational assignment. It is a key part of our management development program

• High potential to move into a leadership role.

• Yes, two types centralized & within the business unit


Describe the Thinking Behind the Black Belt Career Path at Your Organization

• Yes, we've developed a BB career that has been signed off on by the human resources leadership council and interpreted locally within the different business units. Focusing on HIPO candidates, the agreement is to take people out of their day to day roles, puts them in a BB role for 18-24 months and then re-integrates them back into a business unit.

• The Black Belt position is used as a developmental assignment for high-potential employees who are expected to be future senior leaders in the company.

TurnoverTurnover


Is Unanticipated Black Belt Turnover an Issue in Your Company?

Yes (11%)

No (89%)

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Turnover


What Is the Average Time a Black Belt Is in This Position?

0–1 Year (0%)

1–2 Years (44%)

2–3 Years (28%)

3-4 Years (11%)

4+ Years (0%)

Don’t know (17%)012345678

0-1

2-3

4+

Years


What Are the Main Reasons for Unanticipated Turnover in the Black Belt Role?

a) Left the company for another job (45%)

b) Accepted another assignment within the company (55%)

c) Other (0%)

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Reasons


What Does Your Company Do to Address And/or Prevent Turnover?

a) Retention bonus (10%)

b) Career manager (33%)

c) Mentor (30%)

d) Other (35%)Opportunity for growth, Stock Options, Salary Increases, Bonuses

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a b c d e

TurnoverPrevention

Introduction to Oriel


Oriel Background

• Founded in 1983 as Joiner Associates; became Oriel Incorporated in 1997; became part of The SAM Group in December 2001

• Mission: To Be Driven By Passion For Mutual Success

• Areas of Expertise:• Six Sigma

• Process Improvement/Management

• Lean System Methodologies

• Teams

• Leadership Development

• Change Management


Oriel Services

Services:

• Training

• Consulting

• Training and materials development

• Certification

• Licensing

• Products


Six Sigma Training

• Leadership• Champions/Sponsors• Master Black Belt• Black Belt• Tools for Internal Change Agents• Green Belt• Design for Six Sigma• Lean/Six Sigma• Employee Awareness• Train-the-Trainer


Proven Products

• Guiding Successful Six Sigma Projects• Plain & Simple® Series• The Six Sigma Memory Jogger™ • The Design For Six Sigma Jogger ™• The Team® Handbook Third Edition• Voices Into Choices: Acting on the Voice of

the Customer• People & Change: Planning

for Action• Virtual Quincunx


Oriel Contact Information

For more information about Oriel Incorporated• www.orielinc.com• Call or e-mail

• Steve Villaescusa (520) 577-1002 [email protected]


Education

Oriel Six Sigma Retention and Compensation Survey