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Issue dated - 14th April 2005

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The human sigma of performance

Human Sigma is a measure that focuses on reducing variance in key employee and customer outcomes by improving an organisation’s human performance and moving it towards excellence, says Uday Arur

Uday Arur

Six Sigma is a quality improvement programme that links output quality to financial performance, provides tangible measures to help focus the organisation and outlines processes for managing improvement. It calls for a quality level of 3.4 DPM (defects per million) and many Indian companies including TVS Lucas have benefited from application of the Six Sigma concept.

Most interestingly, the humble dabbawala who delivers the Mumbaikar his home cooked lunch at his office – on time, come rain or shine – has achieved the coveted Six Sigma level of performance.

Interestingly, this quality metric (measure) has now been extended to the human side of business – an area that hitherto has never been quite so accurately measurable – and it’s called Human Sigma. Curt Coffman, the global practice leader for Workplace and Customer Management for the Gallup Organisation is credited with this phrase.

Human Sigma is a measure that focuses on reducing variance in key employee and customer outcomes by improving an organisation’s human performance and moving it towards excellence. Simply put, the human sigma approach shows how to manage – and maximise – the human difference.

And these can be used by an individual manager to improve the performance of a workgroup or rolled out across an organisation with dramatic results.

The concept was born out of an extensive research study by the Gallup Organisation involving more than 80,000 managers in more than 400 companies – the largest study of it’s kind ever undertaken. The study revealed direct links between the engagement levels of employees and customers and the bottom-line performance of the firm.

The managerial challenge

How to maximise employee engagement and performance has been an issue preying on the minds of every employer and manager. Usually most plump for the easy option of salary hikes and incentives to achieve their business goals.

While financial benefits certainly have a role to play in influencing employee performance, what is really the key factor is - intrinsic motivation, which is the self-motivation to do a task simply for the challenge involved.

In other words if we find our jobs interesting, challenging, and meaningful, regardless of the payment involved, its intrinsic motivation at work.

Employee engagement results in companies, which are great places to work in.

The business magazine Business World, interviewed the employees of 179 Indian companies for its annual survey on great places to work (BW 6th December 2004).

It defined a ‘great place’ as one where employees trust the people they work for, take pride in what they do and enjoy the company of people they work with.

The survey, which ranked Federal Express – a logistics company – as among the top 25 workplaces in India, provides us some useful insights in to the various processes companies use to increase employee engagement.

According to the MD of Federal Express – Jacques Creeten, there are four human needs of employees which matter in the workplace, Life (survival), Learning (personal development), Love (relationships), and Leaving a legacy (meaningful contribution).

To create the environment where employees yearn to leave behind a legacy or in other words, make a meaningful contribution to the organisation, Fedex does different things:

  • At the interview stage, apart from qualifications, the most important thing is whether the candidate is enthused about the FedEx way of life. This increases the likelihood of a warm and abiding relationship of the employee with the company.
  • Employees are encouraged to enhance their skills. Every person spends 4-6 weeks in mandatory training and development plus another non-mandatory classroom training. In addition, every employee is entitled to a additional $2500 annually as tuition refund, which has encouraged people to take short courses from Indian school of business and Oxford, to add cross-functional skills. Moreover, the company has tied up with an e-learning portal, to provide employees with a choice of over 800 short courses on a whole range of topics. All these courses are designed specifically for the company to fill their vacancies from within.
  • Employees have an opportunity to rise through the ranks – Creeten himself started out on the floor as a package sorter and his boss as a truck driver! To encourage growth from within, and also to ensure it, managers discuss career path and interests with employees and the right training is identified, after which they work with the in – house training department to identify the right growth opportunities for the employees. Managers need a very good reason to hire anybody from outside the company!

The last two initiatives fulfil the human needs of personal development and building strong bonds with the company. Initiatives such as these encourage employees to give their best and leave behind a legacy – or in other words, contribute meaningfully to organisational growth. Legacies include suggesting process improvements. For example, in the last 3-4 years, 60 employees have made suggestions for different process improvements, which have collectively saved the company $6 million annually.

All these processes and activities are measured by a 360-degree appraisal system where every employee has to judge his manager (imagine!) on two parameters – satisfied or not satisfied.

Woe is to the manager who is rated unsatisfactory – he is put on notice, and if he fails to improve over the next few quarters, they are asked to leave.

That is one legacy that no one wants to leave behind!

Uday Arur is a certified management consultant and business coach based in Mumbai. Email: uday@arurbizcoach.com

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