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FIGURE 9-4. elements.
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Employee performance evaluation
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shows how employee reviews can be linked to ongoing employee performance. Formal annual performance reviews aren t enough to help employees improve performance. Rather, they must be accompanied by more frequent communication about performance, such as weekly reports or monthly operations reviews. These reports and reviews must have a format that links to the annual performance reviews, which are then directly linked to a company s strategic initiatives. Performance recognition is an ongoing process. This notion must be reflected by leadership through behaviors, body language, decisions, and actions. Financial incentives are a prime motivator of performance improvement. But recognition coupled with financial incentives that are based on a fair distribution mechanism can lead to dramatic improvement in performance. Innovation is a critical aspect of the Six Sigma Business Scorecard. Innovation must be promoted at every level and at every opportunity. Leadership must plan to help employees develop new skills and expand their roles to help the company grow. Employees need to learn and practice leadership skills. They must also be encouraged to expand their intellectual involvement and personal growth. Such encouragement creates growth opportunities for the company and leadership opportunities for employees. Promoting innovation is a challenging task, and utilizing the brain of every employee must become a corporate strategy. Acquiring the mental involvement of employees is daunting, because it requires employees personal initiative. That normally happens when the employees are self-motivated (a leadership skill), or when there is a significant incentive for recognition or reward, a challenge to create something new, or a desirable performance expectation aligned with the corporate initiative. The leadership must create challenging opportunities with recognition and rewards in order to motivate employees to innovate.
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The main objective of the management must change from its traditional role of managing operations to one of achieving the
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necessary rate of improvement in their areas. In supervising operations, managers must ensure that their employees understand the area or department objectives, have necessary skills and tools to achieve them, and use those tools efficiently and effectively. In addition, managers must make sure that departmental processes are monitored effectively and that performance is reported accurately. In reporting performance, managers must track levels and trends in DPU and DPMO as well as Sigma. When success in the execution of corporate strategies is considered, management performance review is generally very weak. This is so often because managers either do not understand the corporate objectives or are not given enough time or resources to understand them well. Sometimes, the leadership team simply dumps its goals on the management staff, or worse yet, sometimes managers are unaware of the corporate goals. The management team is the execution team, and its members must be fully enlisted in developing realistic goals based on facts, as well as in developing plans to achieve them. They are the real drivers of the dramatic improvement. While the leadership may design goals and objectives, management must own the objectives in order to achieve them. The management performance review must incorporate assessments in the key areas of rate of improvement, breakthrough solutions, direct value creation (including Six Sigma projects), and leadership practices (see Figure 9-5). According to the Six Sigma Business Scorecard, the main emphasis on the management cadre is to achieve the desired rate of improvement, generate savings, and recognize employees for achieving the desired improvement and savings. To achieve a rate of improvement of 50 to 70 percent annually, management must involve all employees intellectually as well as have teamwork, innovation, superior resource management, and periodic review of the departmental performance. The performance evaluation for rate of improvement, breakthrough solutions, direct value creation, and leadership practices must be performed against clearly established expectations for improvement. At the management level, excellence must be ingrained through training and communication. Managers must apply superior work ethics, inspire innovation
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