I typically attend a few lean Six Sigma conferences each year, and at each there’s at least one session about compensating belts. There are any number of ideas for how to do so, but they commonly include systems that provide a percentage of savings as a portion of pay, or provide a bonus for meeting target project savings. There are always issues with these pay schemes, including the fact that belt compensation may be tied to the value of projects assigned to the person or team, or to the accuracy of estimated savings when the project was assigned (an inexact science at best).
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There’s a larger fallacy with these schemes, and to explain it you must know the story of the Brownie of Blednoch by William Nicholson. You can find the original poem as well as adapted stories online, but I'll re-tell the story here in my own words:
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Comments
Great article, Joel!
Excellent article. I remember many heated arguments in Deming seminars (and other seminars we taught in the Navy, based on Deming) when people found that most of their reward programs were actually barriers to productivity and joy in work. This is something that we've known (in the sense that there has been plenty of research to back it up), but putting it into practice has been very difficult. Free, Perfect and Now by Rob Rodin tells about how he got rid of incentive schemes for his sales force at Marshall Industries. On the day he implemented that, some of his competitors gave their people a day off to celebrate the coming demise of Marshall, but a year later, they were the industry leader.
I have to ask, though...pants? Aiken-Drum? Is there a particularly bad pun's punchline lurking somewhere? It sounds like a setup for one of those jokes like "the Beer that made Milt Famey walk us."
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