My New Article in Forbes Explores The Real Reasons Behind Low Performance (And How To Help).
As a business coach, the question I’m asked most often is what to do about low performers. For many managers and organizations, this is a thorny question. Organizations dedicated to supporting their employees feel rightly ambivalent about those whose results are less than expected and below average.
By investing in your lowest performers using your managers and high performer’s talents, you not only save money, but you increase morale and trust across all ranks. If you are company that values your employees (and high performance companies are), this is a matter of living your values. Studies also show that high trust cultures lead to better performance.
If you look at the business case, it makes more sense to invest in improving low performers than firing them. Firing low performers can spur performance temporarily but it’s costly and doesn’t sustain long term results. Guaranteed firing for the lowest performers causes ripples of fear among remaining staff, and that fear over time will distract many of them from achieving their potential. The cycle of fear has been well documented, leading to significantly lower performance.
Business case aside, let’s take a look at results. Jack Welch at GE famously fired the lowest 5% of performers every year. He fired over 100,000 people in his first few years. Profitability soared but only temporarily. He invested in risky financial initiatives that eventually led to the company’s break up. If there were people there who questioned those investments, they were not listened to or not willing to speak up.
HR at Google, on the other hand, routinely and by policy lets their low performers know their status in the context of trying to help them. They have a formal mentoring program set up to improve their results. Over time, they have lowered HR costs, improved performance, and increased mentoring even beyond the formal program. It’s a win-win strategy that has helped them sustain results over the long term.