Many of you may have heard the latest sound bite from one of the founding partners at Microsoft that was broadcast recently as ‘news’. The essence of it was that companies should be looking at poorest performers in their company and firing them, about 6-10% was the figure quoted. Many of the people who phoned in to the talk-show I heard this on, misunderstood what was said, the proposition was not that the company should shrink and that there should be 6-10% less jobs every year, the proposition was that those who were least able to do the jobs should be let go. This is not however a new way to look at a company’s most important asset, Jack Welch introduced a policy at GE years ago that worked on the following premise:- 20% of your team are top performers, 70% are OK and 10% are failing. It was, and is say GE, the managers job to reward and keep the 20% move some of the 70% up (and therefore move up the standard as well) and to fire the bottom 10%.
You may have the same reaction as many of the callers to the show at these propositions…. SHOCK and HORRER that anyone could be so cruel. Who can kick the underdog, which true Brit would not defend the weak and less able? But hang on what is really being proposed here? Business is a fiercely competitive game, like life you need to be able to compete and to ensure survival. To ensure the continuance of your company you need to be continuously improving (evolving if you want to continue the Darwinian simile!). How many people pay their mortgage by working in your business, is it right that they should be put at risk by having to carry people who do not perform? How would you explain that to their kids? Where is the sense in tying up precious resources in trying to train people who clearly have not got what it takes to be trained or who do not have the right behavioural characteristics that the job they are in requires?
This is a quote from a senior executive at Rackspace, an American company and the fastest growing web hosting specialist in the world:-
" Re the exchange on Gallup and the observations by JOHN KOTTER . My experience, (personal and at the time not too happy, but on reflection, amazing results) suggests sacking or making redundant all the neutral and disengaged and freeing the engaged 20% from the frustration and irritation of communicating with their fellow employees who don't get it.
Then you can see the 200%-400% improvement suggested by Kotter. This is too hard for most people to contemplate unless in huge financial problems. However, the more palatable approach I now take is to not hire those who can’t become actively engaged. Why do people who talk about this stuff seldom actually do it in practice? Recruitment is the key, not training and development."
Professor John Kotter is a world renowned expert on leadership and teaches at Harvard Business School
And look at the two companies quoted at the beginning of this article, Microsoft and GE, two of the biggest and most successful companies in the world. We can’t just ignore this.. but what about the people in the bottom 6% (or 10% or 20%, the point is the same) don’t we owe them something?
The bottom 6% are not bad people, they are just in the wrong job. If you keep them in that job you put stress on them, their life is miserable, their colleagues who carry them resent them. You do not do someone a kindness by keeping them in a role they are not capable of fulfilling effectively, you are contributing to making their life a misery. I’ve seen one person I fired many years ago start his own business and become very successful, he was in the wrong role and the best favour I ever did him was to help him do what he should have done himself, leave.
I would also argue that you do not even do the community a service by keeping poor performers in your employ, it does not help to generate wealth (that gets shared by taxes and spending) and it does not give companies that are minded to do so the ability to become engaged in their communities, even if that’s only sponsoring the local kids football team. It puts good employees at risk of becoming non financial contributors in their community (if they loose their jobs) and that’s to ignore the sick pay and health costs of stressing some poor soul out who is in the wrong job.
I’m not suggesting you go out now and fire the lot! I am suggesting that it is a manager’s job to build the best teams and it doesn’t matter how you look at it “….some animals are more equal than others”. We aren’t all the same and in that diversity lies the strength of teams but it’s no good keeping a world class snooker player in the football team even if he does have a his metatarsals intact!!.
Chris Ball is a Director of MBA and a member of the institute of management consultants, MBA Associates Ltd is a specialist consultancy that partners clients to Recruit, Retain and Develop Top Performing Teams. Using sophisticated and proven methods that are different to the usual recruitment agency MBA has an enviable track record of Job Matching with currently over 76% of candidates recruited still in post or promoted within the same group after one year (statistics from Harvard Business review show 14% success rate is average on CV alone!) MBA can be contacted on 01242 821 432,
or through the website at www.mba-associates.co.uk