Peak Performance and Human Factors Specialists

Back to Motivational Maps

THE UNDERPERFORMING PERSON IN YOUR ORGANISATION

All organisations have people in them who are under performing. These people constitute a very serious challenge – in the first instance, to the effectiveness of management, and in the second to the survival of the organisation. One under performing person is a problem; several constitute a crisis; and a critical mass can produce that situation in which fire-fighting is so endemic that the real source of danger is no longer evident to the participants, as they face wave upon wave crashing upon them.

An under performing person – in varying degrees of severity – places a strain on the organisation by failing to achieve targets. But worse than this are the parallel costs which spiral upwards alongside the person’s failure to achieve targets. Their failure puts more direct pressure on achievers and performers to compensate, which they are increasingly compelled to do. This can eventually drain them and lead to their underperformance as well. Think of it as a ailment in one part of the body – the rest of the body works harder, but some organs come under so much strain that they too fail.

Furthermore, somebody has to ‘deal with’ the underperformance – more time, money and resources taken away from direct productivity. Thus, one under performing person isn’t simply a question of losing one salary’s worth of production – it goes much deeper than that.

In fact, if allowed to continue the under performing person can start replicating him or herself – an ailment – within the organisation. Others see their behaviour, and think – ‘I’m working my socks off, what for … when Sam over there is doing so little but getting paid what I am?!’

The larger the organisation, the more likely there is to be a significant number of under performing people.

The key issue with the numbers is the Pareto Principle. Basically, if you accept that 20% of your customers produce 80% of your turnover – and having gone into hundreds of companies we have yet to find one where this is not the case – then you are wise to reflect on the corollary: 20% of your staff are producing 80% of your results. So… 80% are producing 20%!

This is a staggering notion. In fact, the truth of it – anecdotally – came home just the other day. A friend recently took over a business in Cardiff employing 40 people – it was barely breaking even. After analysing its methods and structure, the friend reduced staff to a core of 8 – and 8 turned the whole business into substantial profit.

The question for you as a leader or manager within an organisation is: what are you going to do about under performing people?

To get a grip on how much the under performing person is costing us in real terms and applying the Pareto Principle to this problem, let us take a look at the roots of underperformance.

Anyone’s performance in any area of their life, especially work, hinges on 3 critical factors. These factors are:

1. right direction
2. complete skill set for tasks/project in hand
3. total motivation

For most people (senior leaders have to generate direction) the direction –strategy and goals – are set by the organisation. So, their job is to work within the organisational framework to achieve set targets.

Here is where the problems begin. Performance then becomes about skill and motivation. This accords with common sense. We’ve all met the member of staff who is highly skilled (often has been in post a long time) but poorly motivated – so frustrating! And also met the member of staff who is highly motivated, very keen, but keeps fouling up because they cannot do tasks properly or even at all.

Consider your organisation: who do you know who is

1. SKILLED, but NOT MOTIVATED?
2. MOTIVATED, but NOT SKILLED?

We want high performance, but this is impossible if one of the two ingredients is missing or defective. Again, as an aside, most employers now realise that when recruiting it is better to err on the side of a motivated rather than a skilled person because skills are much more easily developed than motivation! Once motivation goes, there is – as they say – the devil to pay.

Here is a way of getting a handle on how your staff are performing.

Pick two or three members of your staff, or within your organisation, and ask yourself where they fit on this map. Put their initials on it and circle them round.

Most managers find the terminology above very helpful in categorising their staff. Ideally, we want our staff to be ‘motivated artists’ – that is, fully functioning on all cylinders – high performance people.

If we now introduce the Pareto Principle to this model we can put some numbers to the ideas.

You will remember that 20% produce 80% of output, and 80% of staff produce only 20% of the output.

This means that the productive 20% produce 80/20 = 4 units, whereas the less productive 80 produce 20%, or 20/80 = ¼ units. The ratio of 4 to ¼ gives a multiple of 16 times. In other words, the very best performers in your organisation are probably 16 times more productive than the worst performers! This is an astonishing differential, but one most managers sadly nod and agree is about right.

If that is the case, then the Pareto numbers we need to reflect this on our grid as in figure 2.

The worst performer above is 0.5 x 0.5 = 0.25 or ¼ . The highest performers are 2 x 2 = 4. So once again we find a multiple of 16 times.

Figure 3 leads directly on to the key idea of a Pareto Performance Rating. Basically, why not give all your staff a Rating to see how well or otherwise they are performing?

If we take the initials of the members of staff in Figure 3 as our example and transpose the graphic into a chart, it would look something like this in Figure 4.

We can now plot the Pareto Performance Ratings on a chart to see – over time – whether or performance is improving, not just on an individual basis, but collectively.

With this is mind, the HR Manager is now in the ideal situation of being able to put hard – financial - numbers to the ‘worth’ of staff. There is inevitably a reluctance to do this because most HR specialists have a more people-centred philosophy, and pure numerical worth at some level seems distasteful. It may well be something not shared with staff; however, it certainly does have value, especially when two senior people complete this exercise independently and then compare notes. This one activity alone can produce amazing results and a real desire for change.

Basically, the Pareto Performance Rating needs to be set alongside the actual costs of employing staff. The costs are the TPC – Total Personnel Costs and not just the salary. So, this will include National Insurance Contributions, Pension contributions, perks, etc.

Remember, with all this range of 16 times, the average person – and the larger the company, the more likely the average will prevail – is going to perform at 1 times! In other words, their skill is 1, their motivation is 1, and so their Pareto Performance Rating is 1 x 1, or 1!  You essentially pay somebody what they are worth to do an average job. BUT … ideally, you want more. The outstanding member of staff does 4 times better – whereas the nightmare employee is 4 times worse.

On this basis then, figure 6 shows a typical kind of calculation for a given team. The scale of the Performance problem – or issues – before the manager are now crystal clear. More than that, it is not even just a question of getting everybody who is under performing ‘up to scratch’. The parallel challenge is: how do we keep Performance Rated ‘4s’ consistently at that level.

To return to our HR specialist – they, and their MD, will be fascinated to reflect on whether or not the overall PPRV (Pareto Performance Rated Valuation) is going up over time – because it should be! Clearly, the inputs that management make should be increasing the value of the people assets. If the asset value is decreasing, then it is an almost certain signal that the end for the organisation is not far off.

Perhaps the key word that drives or underpins performance for an organisation is the word ‘learning’ – learn or be overtaken. Most people can see that learning is applicable to skill development. But from this analysis it should be obvious that motivation equally should be viewed in the same light. We must learn about people motivation – and frankly, as we’re going to see, the most effective tool which enables learning – for skill and motivation – to occur is MENTORING/COACHING and TRAINING.

If we consider the figures above we discover that for a team of nine individuals the collective PPRV, or asset valuation of the people, is the sum of column 4 = £170,000. After a learning programme, the value is the sum of column 6 = £216,500.  The increase in PPRV is the sum of column 7 = £46,500. Therefore the asset value increase in the people in the organisation is 46,500/170,000 x 100 = 27.3%.

This is a staggering improvement in performance. And it is typical over a six month period or less.

So, you have a problem:
           
Sam is not motivated and/or
            Sam has not got the necessary skill set

This is affecting performance, morale and productivity, not to mention colleagues’ perceptions of the organisation.

What are your options? We think the most likely responses are:

What we see here – if we care to – is the superiority of coaching (and to a lesser extent training) as a mechanism to resolve the crisis for the company. On the face of it, it seems ‘expensive’; however, in terms of the other options and their capacity for turmoil, lost production and sheer sabotage, mentoring is cheap. The beauty of it really is – it treats the motivation issue as central. It knows that no amount of skill per se is enough. So unless the member of staff can recover their own internal motivation, which the coach can help them do, the real problem for the organisation is not going to go away.

For a full explanation to exactly coaching can be effective within organisations, please email or call now.

To Contact Paul please email: paul@darcyconsultants.co.uk or call: 07765 882165

© 2006 darcywebdesign.co.uk