Terminate or Tolerate?


A manager said to me, ““I assumed leadership of a department of sixteen people about three months ago.  Most are reliable performers.  A few are really good and one is marginal at best.”

“Would your team be better off if the marginal employee were gone?” I asked.

“No question, much better off.”

“Then why don’t you work with your human resources’ manager to professionally remove the employee?”

“The employee is sixty three years old.  He was one of the first persons hired almost twenty years ago when the department was formed.  There is scant chance of removing him.”

“Have you tried training and coaching?”

“He’s not really interested in getting better.  I think he’s just holding on for a couple of years until he retires.”

When dealing with a persistent, low performer whom you cannot terminate, I think you just have to learn to tolerate the employee.

Be respectful of the low performer as a person, but do not waste time attempting to train, motivate, encourage, or improve the person’s attitude.  Minimize disruptions as much as possible.  Find work-arounds when you have to.  Understand that you may have to check more often than you would like.   Quit worrying about it.

 

Use “Social Proofs” to Increase Influence


(Part 4 of 5 on Increasing Influence)

A company survey revealed that almost fifty percent of its employees were occasionally out of compliance with its eye protection policy.

Violators gave many excuses:  “I wasn’t in the area very long.”  “The glasses give me a headache.” “They blur my vision.” “I just forgot.”

To increase compliance, management toughened its disciplinary policy, posted pictures of nasty eye injuries, and displayed “reminders” in every nook and cranny.  After a few weeks, compliance increased a meager five percent.

Management changed its influence tactics to stress examples of success such as:  “An accident-free competitor reports that ninety-eight percent of its employees comply with eye protection requirements,” and “The plant with the best safety record in our industry reveals that eighty-five percent of its employees like their wrap around eye protection.”

A few weeks of this campaign showed a seventy-three percent improvement rate.

The successful influence attempt used the concept of “social proof,” where individuals strive to mimic the actions of others.   Most employees have a social need that motivates them to adopt behaviors of successful peers and authorities.

Industry best practices, testimonials, ratings, certifications and the like influence our behaviors because they are manifestations of social proof.

Celebrate Accomplishments, Not Pay


(Part 5 of 5 on Employee Pay)

Of course, you should pay employees well.  Money may not be a good motivator but it can certainly be a treacherous turn off.  Decades ago, Professor Frederick Herzberg, identified pay as a dissatisfier.  For example:

“Surveys say that pay is not a motivator.  Why are you upset?”

“Because you told me I was a good hand but my merit increase average.”

“I like your product but I can’t join your company.”

“Why not?”

“Your pay scale is about fifteen percent below the market.”

Laszlo Bock, of Google, Inc., agrees that you should pay well but put the focus on celebrating accomplishments.

For example, a supervisor promised her team pizza after work for completing a project.  A superintendent created a watermelon party for achieving a performance metric.

Managers, after a good year, organized a steak dinner for employees.  One manager asked his group if they would like anything special.  “Yes,” said an employee, “we like for the management team to serve the steaks.”  They did.  All had a good time.

The manager of a service department organized a pancake and sausage breakfast for improved customer service scores.  Think celebratory events, concert tickets, VIP parking, free books and seminars, and of course hand written notes.

 

Pay Your Top Producers More–A Lot More


Part 3 of 5 on Employee Pay

After a rousing success, an entrepreneur decided to sell his company to a large conglomerate.  Negotiators from the purchasing company, marveled at the entrepreneur’s achievement but gasped at the vast differences in pay among his employees.

Suspecting favoritism, a negotiator commented, “Your pay scale seems to be out of whack.”

“What do you mean?”

“You are paying some people a whole lot more than others, although they are doing the same jobs.  Why is that?”

“Well, some people produce a lot more than others.  I take care of my stars.”

The entrepreneur spoke truth.  Research by professors O’Boyle and Aguinis shows that top producers in most groups do indeed produce more—a lot more—than average employees.  A few high producers pull the average up, making most employees below-average.

Still most pay distributions follow a normal curve which makes the pay scale unfair to the very best producers.  For instance, assume twenty employees in a group. In most departments, about ten employees would receive above-average pay and ten would receive below-average pay.

You want to pay fairly?  Then pay your very top producers at least three to four times more than you pay average producers.

 

 

 

 

 

Be Wary of Using Financial Incentives to Motivate


Part 2 of 5 on Employee Pay

I believe in “pay for performance.”  That is, higher performers deserve greater pay.

However, financial incentive and bonus systems often result in less performance plus other unintended consequences.

Psychologist Sam Glucksberg, in his famous candle experiments, predicted that cash awards would motivate teams to produce better solutions faster.  However, the opposite occurred.  Teams that had opportunities to earn larger cash awards actually took longer to complete their work.

A number of studies in actual companies show that financial incentives often lead to less, not more, performance.  Additionally, incentives may encourage jealously, turnover, and cheating.

In an effort to improve food quality, a large canning company offered bonuses to employees who found insect parts in their food products.  Guess what happened.  Employees started bringing insect parts from home, tossing them into the process and later discovering the parts and claiming bonuses.

For very repetitive work, incentive systems may actually increase performance.  But for assignments that require problem solving, incentives change the focus from “get the best solution” to “do what you have to do to get the award.”

What then is the best way to reward high producers?  How about just paying them more based on managers’ judgements?

Does Your Pay System Encourage Your Best Employees to Quit?


Part 1 of 5 on Employee Pay

After receiving notice of his merit increase, Maddox said to Julian, his manager, “I really like working here, but I guess I don’t understand why my increase is so small.”

Julian responded, “You are an excellent producer but you are already one of the highest paid members of my staff.”

“I’ve heard we’re paying a couple of new employees at salaries that are pretty close to mine.”

“There may be some salary compression due to a tight market for skilled recruits.”

“Then it seems like the rational thing for me to do would be to quit.”

Most merit pay systems are zero sum, meaning that if you give higher percentage increases to some employees, you have to balance that by giving lower percentages to others.

Zero sum systems encourage managers to avoid high percentage increases.  Managers do not like explaining to disappointed others why their increases are only average or perhaps below.

Most internal pay systems compound the issue by setting upper limits for particular skills and by paying more for new hires.

Laszlo Bock, author of WORK RULES, says “In a misguided attempt to be ‘fair,’ most companies design compensation systems that encourage their best performers and those with the most potential to quit.”

Don’t Be a One-Trick Pony


The president selected Johnathon–a no nonsense, high-performer– to lead a low-morale team that had consistently missed performance objectives.

Johnathon announced to his team, “Your performance disappoints me.  You can do better.  I will change what I need to and I expect you to meet all performance metrics.  I will inspect all activities closely and take quick, corrective actions where needed.”

Employees grumbled, griped and blamed failures on unrealistic expectations, vendor problems, a warehouse fire, and bad weather.

Johnathon, anchored like a rock in a sandstorm, continued pressing.  He made changes, terminated a couple of employees, some quit.  The performance needle began vibrating upward.

After a few months, the president said to the team, “You have performed a turnaround beyond my highest expectations.”

Jonathon impatiently asked for even more from the team.  Turnover became an issue again, excuses emerged, and performance stalled out.  Eventually, the president removed Jonathon.

Johnathon’s methods jerked a group of carless whiners into a high-performing team, but he could not sustain the success.  Effective leaders are not one-trick ponies, they adapt.  Structure often turns bad performance into good, but support and freedom is necessary to sustain high performance.