To Cull or Not to Cull Bottom Perfomers...

[Judy McLeish]

At the Employee Factor, we thought we should ask - should you "cull or not cull" your bottom performers.

“If you’ve got 16 employees, at least two are turkeys.” Jack Welch

Jack Welch famously advocated firing the bottom-performing 10 per cent of staff every year. So did Steve Ballmer in April 2006, who admitted to culling one in every 15 employees every year and suggested that all businesses, large and small, would benefit from such an approach.

The question – what should companies do to manage their low performers? Low performers are said to make up one tenth of a company’s workforce. In addition to implementing a clear process to handle poor performers, there is another very controversial method to manage the bottom 10 per cent…implement an annual quota for removing underperforming staff.

The latest research from Hudson Recruitment shows that UK business leaders do want to dismiss an annual quota of underperforming staff. The findings reveal that 61% of senior UK bosses believe that a fixed target for annual staff dismissal is healthy.

According to the study, British business leaders acknowledged that there were distinct advantages to deliberately releasing average or below-average performers.

Ensuring strong team members do not carry weaker ones was cited as the main advantage (60%) of deliberately releasing average or below average performers.

Allowing underperforming staff to pursue a fresh challenge more suited to their abilities (50%).

Bottom-line improvement (36%).

Ensuring that training is spent on those that will really benefit (35%).

Increasing productivity (33%) also rated highly.

But the risks inherent to this strategy were also highlighted:

75% of respondents cited ‘introducing a culture of fear’ as a deterrent to a dismissal quota.

61% felt pursuing such a dismissal policy would lower morale within the workplace.

Just over 10% think that it will decrease motivation in the workplace.

While it was agreed that there are risks to this strategy, the problems associated with inaction may outweigh the risks.

Are you in favor of culling? Let us know your thoughts.

[Kevin Burns - Attitude Expert]

David,

I understand your accountability suggestion. But now here's the real issue: should the individual be dictated to by the organization about how well he or she performs? Companies go out of business because they don't keep up with changing markets, trends, economic realities and HR engagement practices. But at the same time, employees find other work because they do keep up.

It's not management's responsibility to train beyond "competence." It's a complete waste of time to try to improve the individual beyond competence. Some people just don't want to be helped. We've all worked with people like that. That's why there is a top 20%, a bottom 20% and a middle 60%.

So at some point the organization must encourage the individual's growth but the onus is still on the individual to reach for the brass ring. And if they don't, they're likely to be "cut." As much as an organization may want to help improve their people, if their people don't want to be helped, what is a company to do other than let them go?

[Paul Herr]

Wow, Kevin has hit the group's hot button. I think there is a middle ground here.

Let's think about two theoretical managers. Manager A, is a hyper-rational, left-brained type who doesn't understand his own emotions, much less those of the people around him. People, to Manager A, are objects to be manipulated--pieces on a chess board.

Manager B, on the other hand, balances left brain rationality with right brain intuition and empathy. Manager B has a profound understanding of the complexities of human nature and knows that human beings come equipped with five motivational hot buttons that drive high performance.

I got my MBA from the University of Chicago, a very left brained, analytical place that reduces human beings to numbers in an equation, so I have met lots of A-type managers. Fortunately, I have also met many B-types too, many of whom have been spectacularly successful. Most of corporate America, I'm afraid, is run by B-types, which is why only 31% of employees give a damn about their work (Gallup).

Manager A, being hyper-rational, does not understand that human beings come equipped with a sophisticated motivational mechanism consisting of 5 hot buttons. Pressing a hot button, by the way, creates intrinsic rewards that contribute to an employee’s emotional paycheck (all forms of reward, biologists have discovered, are fundamentally emotional in nature). If a manager can press all five of these hot buttons, employees will experience maximum compensation (maximum intrinsic reward) and perform at their theoretical best. In this case, the manager would harvest 100% of the motivational energy of the workforce.

Manager A doesn't understand any of this, because he is emotionally disabled, or emotionally dyslexic. He can only look at performance numbers and cull the low performers. Manager A, because he utterly fails as a leader, only harvests 30% of the potential energy of his workforce. His leadership score is therefore a solid "F". The workgroup could be three times more productive with a manager who had a balanced understanding of human nature and was skilled in pressing the motivational hot buttons.

Manager A, because he is clueless regarding leadership and motivation, defaults to using fear to get a modicum of productivity from the workforce. Fear, however, is an ineffective hot button. It creates negative emotions that reduce the emotional paycheck. Fear also triggers the amygdala (the brain's threat avoidance system) and unleashes harmful, ballistic emotions in the workplace. Fear creates deductions from everyone's emotional paycheck and causes people with a choice (high performers) to escape the toxic work climate created by manager A. The high performers state in their exit interviews, "You couldn't pay me enough money to work under these conditions. Life is short, so why would I waste it working for a jerk like Manager A." The continual churn caused by culling of low performers and loss of key talent creates a tremendous financial drain on Manager A's company and it soon files for Chapter 11.

In this scenario, it was clearly Manager A who needed to be culled because he did not understand the motivational engine that propels high achievement. Manager A just assumed that every employee should be self motivated, and if they aren't self motivated they get culled. This lazy, arrogant perspective denies the role of leadership in motivating the troops, and denies the very existence of the motivational engine. Simply put, it is dysfunctional.

Now let’s consider Manager B, the emotionally intelligent one. Manager B knows that high performance must be earned, not demanded. Monetary pay and benefits will purchase grudging compliance from employees, but it will not purchase their enthusiastic and enterprising participation in the business.

Manager B knows that step one in building a high performance organization involves creating bonds, or linkages, between the employees themselves, and between managers and employees. These bonds create conduits for energy and expertise to flow to where they are most needed in the organization. These bonds are equivalent to connecting separate computers into a powerful intranet.

These linkages are not easy to build because human beings are not quick to trust. Linkages are built painstakingly, one-by-one by listening to employees, investing in employees and mentoring employees. Slowly, over time, a rag-tag collection of self-interested individuals can be bound together into something formidable, a superorganism, a group of human beings who think and act as one.

Manager B is using an approach that aligns with the deep architecture of human nature. This architecture is ancient. We inherited it from our ice age ancestors who hunted in small, intensely-bonded groups without managers, bureaucracies, policy manuals or other artificial systems of control. We can’t physically go back to our lost ice-age habitat, but we can incorporate elements of our lost lifestyle to make the modern workplace more productive, rewarding and human-friendly. Manager B calls this better-way "natural management."

Human beings, you see, are designed to be self managing, self organizing and self motivated without the need for a thick rule book or an army of overseers when they are embedded within committed and tightly-bonded workgroups. Companies that recreate this sort of natural, low-bureaucracy, low-oversight ecosystem, unleash human potential instead of stifling it.

Manager B, as you can see, did not focus on profits or satisfying the customer. Manager B focused on creating a workplace climate that was so excitiing and motivating that employees might have even paided for the opportunity to play. Manager B knew that by creating an emotionally-rewarding workplace (by pressing the hot buttons), she would make lots of money and have lots of satisfied customers.

So what is the outcome of Manager B's contrarian approach. First of all, she harvested 100% of the motivational energy of her employees. Employees who didn't fit into this high-energy, high-commitment workplace stuck out like sore thumbs because they rejected membership into the workplace tribe. Using Jim Collin's analogy of a bus, these folks either jumped from the bus willingly, or got ejected by the other passengers.

So, in my opinion, culling is a tool used by lazy, emotionally-deficient managers who do not understand the subtleties of human nature. Enlightened managers balance cool rationality with a deep understanding of the motivational forces that drive human achievement. The best organizations don't need to cull because this process occurs naturally and organically as the corporate tribe rejects the folks that don't buy into their intense, high-performance culture.

Hope this helps.

Best,

Paul Herr

P.S. If you'd like to explore this "natural management" concept in more detail, check out www.primalmanagement.com. I am recruiting management revolutionaries to turn traditional, bureaucratic, impersonal, hyper-rational management on its head! Viva la revolucion!

[Robert Morris]

Judy:

As I understand it, GE has a forced ranking system, annually classifying all employees within three categories:

20% Superstars
70% Backboners (several of whom have ptential for superstardom)
10% Turkeys

If an employee is an underperformer but personifies GE’s core values, every effort is made to find a position for her or him within the GE organization.

If an employee meets performance expectations but is (in Jack Welch’s words) “a bad apple” or a “pain in the ass,” she or he is strongly encouraged to seek a position elsewhere; and if bad attitude and/or inappropriate behaviour continue, the employee is fired.

Southwest Airlines has one non-negotiable policy: NEVER be abusive to another employee. That is cause for immediate dismissal. Ritz-Carlton has one vision and motto: Ladies and Gentlemen serving other Ladies and Gentlemen.” Throughout the entire Ritz-Carlton organization, there is zero tolerance of abuse of anyone.

Here’s my take:

1. Hire slowly but fire FAST, once you are certain that she or he is an underperformer who will never improve or is someone whose performance may meet expectations but whose values and behavior are unacceptable.

2. Meanwhile, know the strengths of each of those for whom you are directly responsible and get those strengths in direct alignment with appropriate work. Make it crytal clear what your expectations are. Always praise in public but provide constructive criticism only in private. In other words, do everything humanly possible to help each person succeed. Despite that, what if someone doesn’t? See #1.

And here's another important lesson I learned long ago. After tolerating for much too long the inappropriate behavior and negative attitude of one of my most productive salespersons, I finally had to fire him. Throughout the rest of the day, others on my staff stopped by, stuck their head in the door, and asked (in effect) "Why the hell did you wait so long?"

Whatever we tolerate, we condone. That's not the right message to send to everyone else.

[Jay Forte]

My perspective is that if employees have clearly defined expectations, are well hired (based on talents and strengths), and are connected to their work and management, there is no need to define some % of employees that should be culled annually. Instead, performance should indicate who stays and who goes. In today's age of customization, the more we sculpt roles for our employees, the more we encourage them to own their success (or failure). We should evaluate each on their own merit, effort and contribution without any defined culling percentages. This way, employees learn to own their performance and learn to be both accountable for results and accountable for their contributions.

[Larry Underwood]

I don't think any officially mandated culling policy is a good idea at all. See the above reasons. If managers give timely and accurate performance appraisals on under-achieving employees, chances are, they'll see the handwriting on the wall (as well as on the review) and realize they ought to move on, or try to show improvement in the specific areas listed that needs improvement by whatever target date has been set on the review. Either way, the problem is resolved.

In the perfect world with all employees performing well, there should be enough upside potential for employees to move up the ranks, and new employees are usually added. The entire process of hiring and training employees to get to a state of productivity isn't cheap, so losing employees costs companies lots of money, which is why so many companies nowadays are so focused on "retention"...Certainly, they'll lose X number per year anyway, so chances are the self-culling process is the way to go...with no need to make any formal policy. Times are tough enough without casuing further employee trauma with some culling going on, serving only to lower employee morale and performance.