What should an organization do with its low performers?
Managing poor performers out the door
Mar 31, 2014
By Brian Kreissl
Several management philosophies, including the high performance culture and its close cousin “topgrading,” require organizations to exit low performers from the organization. Topgrading, which divides the workforce into so-called “A” players, “B” players and “C” players, requires companies to develop specific talent management strategies to deal with those three categories of employees.
Some organizations set annual targets for termination of poor performers. According to these types of “forced ranking” (or “rank and yank”) methodologies, up to five per cent of an organization’s workforce may be targeted for termination in any one year for this reason.
Nevertheless, there is evidence that forced ranking programs are losing their popularity as organizations increasingly understand talent is difficult to replace and that in some situations it can take years to train and develop a new employee to become even as efficient as a mediocre employee with significant organizational experience.
Forced ranking is also perceived to be unfair and can result in fear, backstabbing, poor morale and even human rights complaints. These programs are also generally expensive and difficult to implement in a Canadian context because notice or pay in lieu of notice is generally required when terminating an employee in Canada other than for just cause – which is notoriously difficult to prove based on poor performance alone.
Leaving the organization voluntarily
However, regardless of which talent management methodologies are used by a particular organization, it is actually much easier (and usually cheaper) to have low performing employees leave the organization voluntarily than through involuntary termination. While low performers will often see the writing on the wall and leave the organization on their own, they sometimes need a “gentle push” before they do decide to leave voluntarily.
Nevertheless, this tactic needs to be used sparingly and very carefully, since there is a fine line between “strong management” on one hand and bullying and harassment on the other.
It is also important to understand the primary goal should always be to attempt to improve an employee’s performance and salvage the employment relationship rather than simply going through the motions and assuming termination of employment is merely a foregone conclusion. Performance management should never be a formality simply to justify termination.
However, sometimes an employee will take the hint that the job or the organization might not be for them and it is simply time to move on.
Suggestions for employers
The following are some suggestions on how employers can help to improve performance or, depending on how the individual responds to the performance management, to actively manage a low performing employee out of the organization:
• Try to diagnose the reasons for poor performance. Does it relate to lack of “skill” or lack of “will,” or is it based on organizational factors beyond the employee’s control? Is the employee out of his or her depth? Would redeployment make more sense?
• Ensure there are no reasons for poor performance that could potentially relate to protected grounds under human rights legislation (especially age or disability). If there are, consider what accommodations the employee may require.
• Ensure that the manager is being fair, objective and not unduly harsh in his or her assessment of the employee’s performance. Are the employee’s goals and accountabilities fair and clearly defined?
• Ensure the individual’s manager provides regular, timely and fair performance feedback and is conducting proper annual performance reviews with the employee.
• Establish and communicate clear and objective standards of performance to the employee. Ensure the manager is providing adequate context and is explaining clearly what her expectations are.
• Explain to the individual why her performance is considered inadequate using specific examples. Ensure conversations are properly documented and evidence is preserved (where applicable).
• Determine if the individual requires any additional coaching or training. Provide career counseling where there is a possibility that the employee might not be a fit for the organization or the job in question.
• Consider putting the employee on a formal performance improvement plan (PIP) with clearly defined expectations and timelines with respect to performance improvement.
• Do not be afraid to give the employee an unsatisfactory performance rating (where justified) or to withhold salary increases or bonuses that are contingent on satisfactory performance.
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Brian Kreissl is the product development manager for Thomson Reuters Legal Canada's human resources, OH&S, payroll and records retention products and solutions.