Maximise the ROE on your performance management plans
Should your performance management efforts be exclusively focused on the obvious poor performer? Or should you be focusing on anyone who isn’t working to the standards and level you know them to be capable of?
In other words, is performance management about poor performance or underperformance?
What’s the difference?
- Poor performance is obvious. It’s annoying. It gets your attention and causes you headaches. This person is not meeting deadlines, they are falling short of quota, their quality and standards aren’t up to scratch, their time keeping is lousy, they have (create) interpersonal issues with their colleagues, they don’t follow the rules and protocols, …
- Underperformance can fly under the radar. It’s insidious. And it can go unnoticed for years and cause you migraines. This person is capable of more. More than what they are giving whether it be quality or quantity. They probably get on fine with their colleagues, meet the most important deadlines and follow the critical rules and protocols – because if they didn’t, it would get your attention. And that’s the last thing they want
Which is more alarming. Well, neither is ideal but underperformance will often, even usually, deliver a bigger blow to overall team productivity for longer unless you act on it.
Do you have these three people on your team?
Assume that you have these three employees in your team:
- Employee A has been with you for 5 years and has a long record of high performance. Over the last twelve months, their performance has tapered. They still produce good results – well above the minimum standard – but they are 20% off their best. It’s not that you haven’t noticed but, well, there has been a lot of change, they are still one of your better performers, everyone goes through fluctuations, ……
- Employee B has also been with you for 5 years and they have always been mediocre. In fact, they reached a settled in just above the minimum acceptable standard within about six months of starting – and have remained plateaued there ever since
- Employee C has been with you for 2 months. They are an unknown quantity and are still about 20% below the minimum acceptable standard – which is normal for a new person. They certainly seem to have the right attitude and you are confident that they will become a solid performer
A performance management ROE analysis
Now, with those employees in mind, have ago at these questions.
- If you could improve performance instantly by 20%, where would you make the largest immediate gain? That would have be A, then B, and finally C wouldn’t it?
- What about the potential for longer term and ongoing gains? A is still the first priority but C probably comes next, followed by B
- Which employee will take the least effort to produce the 20% improvement? Depending on why A has declined, they may be a reasonably quick fix. If C was well recruited, they should respond quickly. Meanwhile, B has been resisting all efforts for improvement for nearly 5 years. Why will now be any different?
- If you don’t act, where could the consequences be most significant? That’s an easy one. It’s almost certain that A is declining for specific reasons. Perhaps they are stale. Maybe they have become dissatisfied or feel unappreciated? If you don’t find out why, their decline could accelerate quickly and become irreversible. If C was a good recruit, you don’t want to see them fail to meet standards and be moved on. And B? Would you be any worse off without them? If they continue to underperform, would it be easier to fix them or replace them?
And the winner is …..
- A offers the largest immediate and long term gains, may be quick to respond to performance management and the consequences of not responding are significant
- B offers minimal gains, short or long term. Any gain are likely to require a lot of effort and the consequences of not acting are minimal (as long as they go somewhere else to underperform)
- C has plenty of upside both short and long term. They are likely to improve quickly as long as they were well selected – and you would prefer not to lose them before you know how good they will be
When logic hits the fan
So, let me ask one final question
- Which one inevitably gets the least performance management time, effort and attention?
In 99.9% of organisations, A will get the least energy. Why? Because they aren’t the squeakiest wheel. They are a concern but not a crisis. Your people aren’t kicking down your door complaining about them. Your manager probably hasn’t noticed that they have declined.
It is easy for leaders to become reactive about performance management. Poor performance is like an alarm bell going off – it is obvious and irritating and draws immediate attention.
When leaders become reactive about performance, they fail to consider the ROE (return on effort) of their performance management choices. The point is that we shouldn’t be so focused on poor performance that we miss issues of underperformance.
In an ideal world, you work on both – but in the real world, time and energy are limited and you have to allocate it to performance management priorities that will give you the greatest gains.
B doesn’t get off that easy
Let’s go back to B for a moment. Are we suggesting that you allow them to get away with underperformance? Absolutely not. Our golden rule of performance management is never, ever allow someone to be comfortable with poor performance.
What we are saying is that they shouldn’t be allowed to dominate your time and energy at the expense of responding to performance issues that offer higher ROE.
Our free e-book, Managing Poor Performance,will give you a lot of strategies to deal with B. In short:
- Have clear respectful conversations about their performance issues
- Make them accountable for their performance
- Clearly outline your requirements and the consequences for not meeting them’
- Be prepared to follow through if they don’t respond
Most of all, don’t allow endless unstructured conversations with them that end without tangible outcomes to become an energy and time ‘black hole’.