How to create an Incentive scheme to boost Self Organized Productivity?

The Issue

Creating an incentive plan or scheme in an organization is a tricky affair. Most don’t seem to get it right. As a result the desired goals are left unmet. So the top Management feels that they lost in the bargain. And surprisingly the employees also think the same that they have been unfairly treated or cheated by the scheme. Nonetheless it leaves behind a bitter taste that isolates Management from its most vital resource — the employees.

What is known or desired by Management?

However, the aims of any well-meant incentive plan is clear; some of those being —

a) Improve productivity through self organized improvement of efficiency and effectiveness of a production system.

b) Improve self managed quality as an inbuilt factor into any production system

c) Enables employees to quickly discover systemic faults in the production system and self correct those through self-initiated interactions.

What is Unknown by Management? 

a) Management does not yet have a model to work out an incentive plan/scheme that is not only systemic but also self organizing to improve the system.

b) Presently management looks at bits and pieces of data to create work wise incentive plan that is applicable to an individual or a group or a department at most. It does not know how to create an incentive plan that would map and address both interdependence of different departments and their independence too.

c) The same goes for correctly evaluating or assessing the contribution of different types and grades of employees who work in various departments.

d) Management is also unaware of the type of data to look for that would not only help them create the right type of incentive scheme but also keep the inherent dynamics of the system, where the central idea is to create a dynamic incentive plan that helps the production system to be resilient rather than a static one, which can prove to be quite anti-resilient and limiting.

What is needed? 

a) A clear understanding of the system dynamics.

b) The maximum and minimum potential of the system

c) What would be the stability zone to operate in and how to predict when instability sets in?

d) The inherent potential for the system to improve without any additional investment

e) The limit beyond which only additional investment can improve productivity.

f) The right parameters to be selected

The Resolution

The resolution to the above issue is depicted by the conceptual model as shown below:

incentive Plan
Incentive Model

Results

This model (based on science of complexity) was applied to one relatively large Indian multi-national unit and the results were the following:

1. Productivity improved by 1.75 times within 2 months of implementation of the scheme.

2. Self organized improvements took place

3. Real time communication increased between employees

4. Quality improved and sustained.

5. The improvements were self-sustaining without any other capital investment.

Advertisements

Feeling/Thinking in Nemetics – A Challenge

Here is a challenge in Complexity Thinking as in Nemetics (2nd stage): –

How or by what method would we be able to figure out  or feel possible or approximate directions to the following questions around a complex adaptive system or a complex creative system — human being.

1. Around what time human beings or their ancestors were able to stand erect?

2. Around what time human beings started to cover their bodies or wore clothes or dresses?

Hint:

Any complex adaptive/creative system has many elements in it which are interdependent and coexist and co-evolve along with other elements over time.  As one thing changes the other changes too. The trick is to feel the ecology and then think of elements that were present in the ecology of the human adaptive system right from the earliest times and have evolved along with human adaptation through the ages.

Feelings/Thoughts?

 

(note – such feeling/thinking is needed in the Engage stage of Nemetics, which comes after the Notice or Attention stage of Nemetics)

Self Organized Nemetic Environment for Learning (SONEL)

Have Fun & Learn
Mr. Shukla and I with the group of 28 who challenged Vibration Level 2 and Level 1 certification at PMI, Noida during last week of August 2012. 22 of these curious and brave souls successfully met the challenge.
Mr Shukla (from NTPC) is on my right and Mr. Anil Sahu is on my left. Both were my co-facilitators. As usual I am the shortest of the lot in dark green shirt.

Self Organized Nemetic Environment for Learning (SONEL) is a learning environment based on self inquiry of a person’s own problems helping one to instantly learn from those; supported by rich dialogs that build on each others ideas, questioning and peer learning aided by finding specific information from the internet.

Let me illustrate this through a practical example of how it is done.

The Story

NTPC (National Thermal Power Corporation) is the largest provider of power in India. They have a mission, which simply is to keep availability of their plants at the highest possible level. Since power plants like any other plant is a complex system it is not possible to plan out operation and maintenance activities in such a way to avoid sudden breakdowns and outages.

In order to do so they would have to base their actions on their understanding of the complexity or complex behavior of the plant and machinery. That is how we can work with any complex system, which creatively on their own keep changing their behavior. So the strategy is fairly simple — a) Understand the complex behavior of a complex system b) Spot an incipient failure growing or emerging c) Model that possible failure to determine what best can be done d) Take action to eliminate the failure or avoid it or reduce the risk of the failure to the minimum possible level e) Keep monitoring for the next emergence to appear.

In technical terms such a strategy is known as Condition Based Maintenance. That is the traditional name.  I don’t see any reason as to why it should not be called Complexity Based Management since the principles just remain the same. The same principles can be used over and over again to understand, decide and act in any complex environment, such as in organizations. I shall leave that discussion for some other day.

Coming back to our story one of the vital tools to implement such a strategy of knowing things in the now is Vibration Analysis, a very powerful tool since all machines and complex systems are dynamic and therefore vibrate in some way or the other. The tools and instruments of vibration analysis faithfully record the amount and the nature of vibration in various ways. However, only a human being can make sense of such records and form an understanding of what is going on. But the depth of understanding would vary from person to person depending on a person’s feel for complexity and understanding of the subject of vibration.

NTPC realized this very vital gap of enhancing human understanding in the whole strategy. This gap can only be filled through insightful and in-depth learning from a person’s intimate understanding of complexity informed by his/her practice. Hence they decided to expose as many people as possible to the subject of vibration analysis where they learn and apply their understanding to maintain a healthy level of plant availability.

So, every year NTPC organizes this all India SONEL event in Vibration Analysis Level 3 to Level 1 for their plants scattered all over the county. A suitability criteria is given, which basically sums up as ‘Are you practicing vibration analysis and complexity on the field?”. Against this criterion practitioners who are interested in challenging Level 3, 2 or 1 certification apply. Along with their applications they submit two case studies reflecting their failed struggle to understand the nature of complexity. The more intense their struggle as reflected in their cases better are their chances of being selected for the course. The idea is one can really learn very deeply from his/her cases and struggles. Only 25 students are admitted per batch.

Each candidate admitted to the course then submits at least two more case studies 15 days before the start of the course. From all the submitted cases (around 100 in number) the course work is carefully designed with a collation of appropriate questions to be used as triggers for live on-going classroom dialogs and peer learning.

Then a 4 day live workshop is conducted in the style of a concert. The only difference being that participants perform while I and my co-facilitators take up the role of the conductor. One by one participants lay bare their individual cases to the entire class with the hope of seeking a resolution of their problems.  They learn from the questions that are posed to them.  They learn from the ideas of others. They learn from the successes and mistakes of other practitioners who are their peers. Through the interactive sessions facilitators spot more weakness in the crowd and note them down for addressing them later. After some time through the rich dialogs the participants learn whatever they want to learn and decide on their actions customized to the problems they faced.  The atmosphere of serious play is constantly charged up further through more questions, interjections, explanations, suggestions and guidelines if any.

The questions for the final exam are formulated from whatever is happening live in the class and from the case studies.  The participants challenge the test by the end of the 4th day. Each participant is allowed to carry one A4 sheet of paper with their own notes, whatever they like to the examination hall. Obviously, I haven’t seen them using those notes since the final test is not a test of their memory, which I know they have in plenty. They get certificates as per the bands they achieve. For example, 90% and above get Level 3, 70 to 90% get Level 2 and 50 to 70% get Level 1. Below 50% get a certificate of participation.

Next year those in Level 2 come back to challenge Level 3 and those with Level 1 or with a participation certificate come back to challenge Level 2 or Level 3 along with a new batch of fresh candidates.  They can participate in the events twice a year. There is another interesting thing that happens on the side. A two hour video conferencing is conducted for all the plants for those participants who have already secured Level 3 certification.  It is a type of a feedback session trying to gauge as to how well the participants are doing. In most cases I found that their peers talk highly about them and their subsequent achievements in practice. That makes me proud indeed. Why not? Continued Peer Recognition is the best certificate in the world.

Notes:
  1. Self organized learning is learning on ‘my problems‘ through interactions with other human beings (including those on the net).
  2. The role of the facilitator is important. Conducting such a Self Organized Nemetic Environment for Learning (SONEL) is a tough job. One has to be on his/her toes through all sessions — in sharply creative and attentive mode.
  3. The quality of the interactions is important to achieve the learning goals. That is the job of the facilitators.
  4. Three facilitators work in tandem. One facilitator is drawn from the participating organization and one more knowledgeable facilitator is drawn at random from any other organization. In this case Mr. Shukla is from NTPC and Mr. A Sahu is from Birla Copper (shown in the opening photo)
  5. The learning follows the non-linear Nemetic process of a) Noticing/discerning changes b) Engaging with interdependent constraints c) Mull about the deep and rich interactions d) Exchange value through adaptation, re-design, actions etc. (NEME)
  6. This time around in Dec I shall tweak SONEL a bit more. The participants would set their own questions for an interim exam.
  7. This certification is now widely sought in India and employers are happy to see this certification for employment.
SONLE
Vibration Level 2 certification.