Does the company deals effectively with poor performers ?

This is a question for an engagement survey to be deployed by a company, allowing us to know if the peers are concerned and/or affected by the behavior of the low perfomers in the organization.

 When willing to take care of the overall performance, not only as the addition of individual performances, but as the result of the individual interrelations which conform the group's behavior, we must know what's  the sensivity level related to the response of the management, when facing the issue of a low performer employee.

 In order to reinforce the attitude of the high or middle performers, the core of the organization, we must ask them about their concerns and expectations when dealing with LP, simply because they are our main asset, and the most involved stake holder

5 reasons to get rid of low performers

Amazing ( elementary ) proposal: give them a job at the competition

http://www.youtube.com/watch?v=J34KuLGzNEg

I would advise BilltownBoyy, the owner of this Youtube channel to read, in the previous posts of this blog how to improve the performance, before getting rid of them.

We are suposed to be managers, not firing machines, and people is the main row material for succeeding in reaching the goals of the organization, according to it's culture.
Mission, Vision and culture are the principles of the religion that any employee in a company, does not matters in which level of the organigram, has to follow with no doubts about how to understand the message.

Dismissing, laying off, getting rid, firing,  don't care how we want to call it, must be the last option, to avoid becoming a low permormant manager

Renters instead of owners

This is how the low performers are defined in a very interesting post in Allbusiness.com, about the management of performance.

The proposal is simple, in two steps:

First: decide to analyze the level of performance of the employees. Same issue of previous posts: the manager must be the one to understand that low performance is an issue with impact in all the organization, not only the attitudinal problem of an individual employee. A coward manager, is a low performant manager

Second: Face the problem, explain your point of view and the targets for the job, evaluation, follow-up and take action if there is no visible improvement.

Start with a detailed and proper Job description, to avoid any kind of misunderstanding, and an accurate and professional performance appraisal. Coach them. ( please, coach! )

From the post:

“Many healthcare organization leaders are spending 80 percent of their time on the 5 percent of employees who are not meeting expectations.”

"A useful tool is a staff differentiation worksheet that defines each type of employee with specific characteristics across five traits: professionalism, teamwork, knowledge and competence, communication, and safety awareness."


"Basically, high performers are people who bring solutions. Middle performers can identify the problem but may lack the experience or self-confidence to bring solutions. Low performers tend to blame others for the problem. They act like renters instead of owners. "

"..consequences if performance does not improve by a date you specify. Then follow through and take action."

Performance + Potential

John Belchamber signs a post in invokeresults, the blog linked to his consultancy firm for SME’s, were he explains the difference between :


Performance ( is happening now or has happened – measured via your KPIs) and
Potential ( is a thing that will happen in the future – measured with tools such as DISC & Aptitude Assessments )

The matrix is reduced to four options, making more simple to align both characteristics and, thus, being able to make the best choice for the developement of the employees

It is very important to follow his recommendation, that I transcribe directly:

Thinking about how your people fit into the Performance Vs. Potential Matrix, ask yourself the following questions:


• Do I know where my people fit in the Performance Vs. Potential Matrix?


• Do I have the right people, in the right places, performing the right tasks?


• What’s stopping me doing something about this?


I would like to pay special attention to the last one which, once is solved, will trigger action to develope the other two.

From the position of Managers we must reject the options of doing nothing, expecting for a change, or moving the employee to a new position, or assigning some tasks to others because, in fact, this are not even options, are simply ways of delaying the only possible management action: work actively to move up or to move out the low performer.

Execution is a main part of the manager's role

Rank incentive for raising performance

When searching for tools to motivate our people, we can take the choice of making visible rankings , where each one can know which is his/her mark, as well as others classification.

When doing this, we expect to satisfy and recognize the effort of the high-performers and motivate the low –performers in order to improve.

This is a general belief, but in July 2.010 a paper has been published, demonstrating the opposite

“Rankings and Social Tournaments” from professor Iwan Barankay conclusion is that rank incentives are negative in the sense that demotivate high-performers, while is not getting much or better from low-performers
When a High-P knows the classification, trends to reduce his/her effort.

After the experiments, where two groups of workers, one receiving feedback, the other being considered as reference group, were asked to return to work, “those who receive feedback are 30% less likely to return and when the do come back they are 22% less productive”.

While High-P can search for other challenges, the Low-P can’t expect to have opportunities in the market, so this trend will drive to retaining only the Low-P.

If there is no clear indication taht some individuals or, much better, some teams, will be positively motivated by knowing the ranking, it’s better not to use the system.

Is task significance a key driver for performance?

Can someone be motivated at work when having a job with no social relevancy, invisible for colleagues, relatives and friends ?

Professor Adam M. Grant performed an investigation described in the paper “The Significance of Task Significance”, where he tested the following Hypothesis:

1-      Task significance increases job performance

2-      Increases in perceived social impact mediate the effects of task significance on job performance

3-      Increases in perceived social worth mediate the effect of task significance on job performance

4-      Conscientiousness moderate the effect of task significance on job performance, such that the lower conscientiousness is, the greater is the effect of task significance on job performance

5-      Prosocial values moderate the effect of task significance on job performance, such that the stronger the prosocial values are, the greater is the effect of task significance on job performance

This requires some definitions to avoid misunderstandings:

a-      Task significance: Subjective judgement that is socially constructed in interpersonal interactions, but also an objective characteristic of the job itself, sharing both theoretical perspectives that once the perceptions of task significance are cultivated, employees are more likely to perform effectively

b-      Perceived social impact describes how the employees feel that their own actions improve the welfare of others

c-       Conscientiousness describes the degree to which individuals tend to be disciplined, dependable, organized, goal oriented, and persistent

d-      Prosocial values describes the extent to which individuals regard protecting and promoting the welfare of others as important guiding principles in life

The investigation concludes that there is a causal effect of task significance on job performance.

Possible actions:

-          Cross departamental meetings where each one can understand the importance of her/his  tasks for the performance of the next step in a process.

-          Make possible that all the employees can have a global vision of the processes in which they participate.

-          Meetings with external partners where the employees can assess and understand  the relevancy of their job.

-          Listen, as done in the experiment, from the individuals receiving the benefit , what is their perception

Definition

Job performance refers to the effectiveness of individual behaviors that contribute to organizational objective

( McCloy, R. A., Campbell, J.P. & Cudeck, R. A confirmation test of a model of performance determination. Journal of Applied Psychology, 79, 1994, pages 493-505)

Pay per performance

When talking about pay-per-performance, we usually refer to concepts related to kpi’s, incentive systems based in the setup of indicators to meassure the performance of the individuals or teams

The Salary Budget Survey, performed by WorldatWork for the 2010-2011 period, covering 2.500 respondents in the U.S., refers to the average base salaries increase, free of any kind of calculated variable incentive.

This is what, and how, the companies will modify the salaries of their employees, according to the perceived performance.

As a summary of the report and the attached matrix:

- 2,5% average salary increase across all employee categories for 2010
- Low performers can expect up to a 0,7% increase ( or none )
- Middle performers will see a pay raise of 2,4%
- High performers can expecta n average of 3,7%
- 24% of the employees are rated as hich performers
- 8% are considered low performers

These figures are pretty coincident with the 20-70-10 classification proposed by Jack Welch:

"I really support differentiation—ranking employees into performance categories of the top 20%, middle 70%, and bottom 10%, and then managing them “up or out” accordingly. But don’t companies face all sorts of resistance when they try to implement this system?"

This is a transparent-clear message for the low performers: up or out. Is the manager the one to make all the effort to support the employee to go up

Classifying employees according to performance

A proper performance appraisal should end in a valuation on how the employee meets the targets.  Also setting the targets, and knowing the developement needs for the next period, but this post is to talk about the performance of the last period.

The basic of the performance appraisal meeting is to have an open discussion about the main targets, and the level of performance in reaching such targets. When participating in a  yearly meeting, the employee and the manager must check the main facts of the previous year, going through each one of the agreed goals and the related valuation parameters or kpi’s.

The next step is to agree on the level of consecution, which means agree on what both understand as high or low performance,  taking into consideration that the individual targets must be aligned to the corporative ones, but there is some room for individual fine-tuning, which must be known by the employee.

If the valuation uses a 5 level ranking, this should be:

1-      Does not meets with the required performance

2-      Partially meets

3-      Meets

4-      Sometimes exceed

5-      Greatly exceeds

Some employees are disapointed when receiving a 3, when this is not the result for an “average employee” ,  but the result for a good employee delivering the expected performance.

In the next step, the manager must think about the potential of the employee, understanding "potential" as the growth capacity, and look at the following matrix, were in each bin there is a classification, a description of the situation and a proposal for responding to the employee needs.

Certainly,  there is only one situation in which we are talking about a pure low performer, when we have low performance and low potential, because it is noticeable that in any other option of low performance or low potential there is a positive expectation of improvement.

Success in managing LP

1-   The American Express choice was to bet for a more challenging way of managing the call center service.

Basically, giving more independence to the agents, so they can offer more relevant information and assistance to the customers.

The tools: empowerment ( better recruiting, upgrade training) and engagement ( increased recognition, career path ), and a pay-for- performance system

“Unengaged employees can’t create engaged customers.”

They changed their way of dealing with low performers, from putting them on a remediation program, as in the past, to the setup of incremental goals, supported by coaching from supervisors and experts, and providing with additional training. 50 to 60 percent stays

2-    At Gen-Probe they increased the retention rates of high performers and a 37% descrease in retention of low performers

A new performance management system was implemented, based in four elements: alignment of the individual and corporate goals, provide freqüent opportunities for feedback, pay-for-performance, and improvement of the employees's and managers's skills for communicating goals, performance expectations and address issues in time.


I can summarize that challenging the employees is a must ( in any situation of the life of the organization ), but specially when dealing with individuals or teams that are delivering under the expectations


Sources:

Amex 
Gen-probe

Effects of working with LP

From the Leadership IQ survey,

•  87% of the employees say that working with LP has made them want to change jobs.
•  This will end in a hidden HR politic were only the LP will be retained by the organizations
• 93% of employees say that working with a LP has decreased their productivity

Studies on helping in the organizations focus in the OCB ( Organizational citizenship behavior ) which is a contructive behavior, not required by the employee’s job and intended to make a positive contribution to the organization, including helping colleagues with their work

But in the paper “Peer responses to low performers: an attributional model of helping in the context of groups” ( Academy of Management Review 2001, Vol 26) the autors describe how do the colleagues help the low performers, according to three attributional dimensions:

• Causality: Refers whether the perceived cause is in the autor ( internal ) or in the situation ( external ) 
• Controllability: Assesses beliefs about whether the actor can influence cause that determine the outcome of an event
• Stability: Assesses whether the cause of an event is permanent ( stable ) or varies over time and context ( unstable)

 The colleagues will react trying to:

• Motivate
• Train
• Compensate ( perform some of the low performer’s tasks )
• Reject

 In any case, an expensive time investment, to compensate someone’s limitations

Reasons for LP

If we define performance = ability x motivation, were


ability = person’s aptitudes

 motivation = desire x commitment,

When noticing low ability, we should check:

• Over difficult tasks
• Low individual aptitude, skill and knowledge
• Evidence of strong effort, despite poor performance
• Lack of improvement over time.

But when feeling low motivation, we must check the level of stress, which is one of the drivers of low productivity, before addressing our effort to raise the motivation.

The paper “The effect of stress and satisfaction on productivity” ( International Journal of Productivity and Performance Management, Vol 50, No 5, 2010 ), reports the following findings: Increased stress leads to reduced productivity and increased satisfaction leads to increased productivity. When work begins to overlap with workers’ peersonal life this implies a negative effect on productivity. Quality work is more related to conscientiousness and personal satisfactions than to work load. Energetic and active individuals affect productivity positively.

To improve motivation we can:

• Set the performance goals
•  Provide performance assistance
•  Guarantee performance feedback

Sources:

http://www.mindtools.com/pages/article/newTMM_80.htm

Managing low performers

Summarizing some proposals, on how to deal with low performers, it is an evidence that the problem must be tackled bluntly, face to face.

No reason for changing the company to create a position for the low performer, or waste time and money in training, while there is not a deep insight in the situation

Having honest performance appraisal meetings ( at least yearly ), would be a structural method to avoid surprises.

As is has been criticed by Jack Welch, a manager can’t tell to an employee that he’s not performing as expected, after twenty years of service, when he has never received a single complaint, so he has defined himself the standard of quality accordingly to his daily performance

How should look the meeting ?:

- I’m not satisfied with your performance and we will try, together, to fix it.
- Can you describe your job?
- Do you have what you need for your job?
- Are you adequately trained?
- Is something at work preventing from doing a good job?
- Get commitment to improve
- Set short evaluation periods
- Check if low performer is moving up, or take the option of dismissal


Some sources:

http://www.mrcpa.org/pdf/606k.pdf
http://smartlemming.com/2009/06/low-performers-both-sides-of-the-coin-being-one-and-managing-one/
http://leanjourneytruenorth.blogspot.com/2010/03/how-to-deal-with-low-performers.html
http://www.mindtools.com/pages/article/newTMM_80.htm

the low performer characteristics

Searching for definitions in the net, in order to have a starting point, there is a  survey by  Leadership IQ were 6.241 employees described the main and more standard characteristics of a low performer, in order of importance, which are easily recognizable:

• Negative attitude
• Stirs-up trouble
• Blames others
• Lacks initiative
• Incompetence

All five are attitude related, no one takes into consideration the lack of competence due to a wrong job assignment, when the responsibility should be moved to the manager shoulders.

warming up

This is going to be about the reasons for low performing, the reactions versus low performers, support or criticism, the consequences of having low performers in a group..

I would say that performing is a fact of life, while low performing is a way of life, but maybe there are reasons, wished or not, to justify certain performance in front of a given task