You know what needs to be done!
Now is the time to do it!
Just Do It!
JANUARY IS THE TIME FOR RENEWAL AND PLANNING FOR THE NEXT CHAPTER FOR YOUR BUSINESS, SEEKING TO IMPROVE. EVERYONE KNOWS THE LARGEST VARIABLE IN ANY SERVICE BUSINESS IS THE PEOPLE. EVEN SMALL CHANGES IN STAFF CAN MAKE A LARGE IMPACT ON THE FUTURE. JANUARY IS GREAT TIME TO REVIEW YOUR STAFF AND MAKE THOSE TOUGH DECISIONS THAT WILL ALLOW 2014 TO BE A BETTER YEAR THAN 2013.
Who are you carrying in your company?
Jack Welsh the former CEO of GE subscribed to the 20-70-10 rule. 20% of your staff generated 80% of your results; they were the rock stars that made it happen. Like thoroughbred horses you let them run and do not harness them to pull the mundane loads of the business. You care, nurture and reward them generously.
The other 70% of the people support the top 20% and execute on what was required to achieve the company’s goals. They do not create the greatest impact, but they contribute and are required to get things done while the top 20% seek the next big opportunity.
Finally, there is the bottom 10%. These are the people that struggle to make a contribution. Sometimes they create more drag than momentum. They seldom carry their weight and end up being carried by the others. Most of you can look at your organization and point out this person(s) without much effort. The real issue is nobody wants to be the one who makes the tough decision to propel this employee onto their next job outside the company.
Rotting from the core.
While some people must actually be told to leave, ongoing feedback should create a culture where low performance is no surprise to the effected parties. In many cases they will self-eliminate themselves before you have to fire them. You must create clear expectations of performance so that everyone knows what must be achieved and if they slip below that 10% line they expect be subject to consequences.
Some of the reasons I hear as to why not to cull the bottom 10% of employees:
- I will have to train someone.
- They are a good person.
- I am too busy and need even a poor employee.
- How do I know if I will get someone better?
These are poor excuses and do not hold any real creditability,
- Training should be documented and allow for a qualified person to step in and run with the role. If that is not the case you have larger problems.
- Most people are good; it is their behavior and lack of performance that you dislike. They have not made a choice to change.
- You are busy because the low performer is a burden and not helping you focus on your most important items
- If you utilize a systematic approach when interviewing and you are replacing one of the bottom 10%, you have at least a 9 out 10 chance of getting someone better than the low performer that you are replacing.
The Shark in the Tank
The best reason to eliminate the bottom 10% of your workers is the rest of the staff will realize that if they drop below the 10% line, they are at risk. They will put forth the extra efforts to ever being considered a low performer and avoid putting themselves at risk. I have seen many companies where employees become complacent and feel that little effort is required. They do the minimum and have little or no initiative to push a little harder.
Dealing with low performers helps drive productivity in the organization. A great analogy for dealing with this situation is the idea of putting a shark in the fish tank. In a fish tank without predators, the fish have no reason to swim. They become sedentary and lethargic. This creates a higher mortality rate. However when you introduce a shark to their environment, the fish begin to start swimming to avoid becoming a snack for the shark (even though he is not hungry or hunting) and they stay in motion retaining their muscle mass. The mortality rate for fish drops even considering the fish that the shark does consume. In addition, moving fish are more attractive to observe and view anyway.
The enemy of great is……..
Do you have a shark swimming in your tank? I am not promoting an environment of fear, but a work culture with consequences. With as few as five employees, companies can upgrade their gene pool and get positive results. However if you choose to settle for low performance, then the best you will ever get is mediocrity or just below average. Jim Collins says, “The enemy of being great is settling for being good”. While it takes some incremental efforts to be great, the payback is multiples of just being good. This is so very important for the smaller the company as one bad employee in a 5 person company has a 20% impact, while a single bad apple in a 20 person business only has a 5% impact. In either case it should not be ignored
2014 should be a moment of truth for the bottom 10%.
Ok, but let’s not step in it…………..
Caveat: If you have to terminate a person you will need to document the performance issues. While semiannual reviews are the norm, having a system and doing it at least quarterly (if not bi-monthly) will provide justification for the termination. Sometimes the employee will actually self-select themselves for advancement out of the company (they quit).
Originally Posted 1/15/2014