Getting More from Your Employees: The 20-60-20% Rule
“Average” isn’t good
enough any more. Not in this competitive environment. Not in this lagging
economy. If you accept average performance from your employees, you’re doing
your company a huge disservice.
So why is it then that
so many of us mutely accept mediocre performance? Perhaps because raising the
bar isn’t easy. Taking corrective action can be unpleasant. And if you haven’t
done any of this before, it may not be clear how or where to begin.
One place to begin is
with the 20-60-20% rule. It goes like this: rate the performance of nearly any
employee group, and you’ll find the population divides itself into three
Now, you have three
possible places to begin, but which one’s most critical? Here’s a clue: your
strong performers are already doing fine under your current management, so don’t
waste time fixing what isn’t broken. We’ll come back to them later.
That leaves your average
performers—your majority—and your weak performers, a smaller but more dangerous
group. Who to start with, and what do you do?
The good news is, you
can, as they say, kill two birds with one stone. According to research, when you
start vigorously managing your weakest employees, it makes the biggest impact on
your next group up—namely, your average workers.
If you aren’t taking
action against underperforming employees—employees who aren’t productive, who
come in late and waste time or perhaps don’t come in at all—what message does
that send to the average worker?
It tells them that there
are no consequences for performance. Remember, your employees are well aware of
one another’s behavior, even if management pretends not to notice. This fosters
a culture of apathy and negatively that drags everyone down.
On the other hand, if
you start holding underperformers accountable, many of your average employees
may just step it up a notch, all by themselves.
How To Handle
There are a number of
ways to manage poorly performing employees. Start by creating job descriptions
and performance standards for everyone—a step many small employers wrongly
Job descriptions are
incredibly useful tools. They tell employees what’s expected of them. They give
you a standard for measuring performance, a must when it’s raise and bonus time.
And they protect employers against wrongful termination suits, because now you
have a specific tool for documenting problems.
If someone isn’t
performing well in their job, figure out why. Is it a training issue? If so,
make training available and you may solve the problem. Is this person a good
worker, but poorly suited to his job? Then see if there’s a more appropriate
role for him elsewhere in the company. Or does she simply have very poor work
habits? If no matter what you try, you can’t motivate her to improve her
performance, you need to do the toughest thing of all: terminate her.
Are you familiar with
“Neutron Jack” Welch, the former CEO of General Electric, who is famous for his
extreme managerial practices? Back in the 1980s, Welch insisted that each year,
every department manager rank his or her personnel and eliminate the bottom 10%
of workers. His theory was that it raises performance expectations and keeps
everyone—even stellar employees—on their toes. Fear of losing one’s job is
While Welch’s practice
was radical, it’s also radical—dangerously so—to keep non-performers on board.
Plain and simple, they are hurting your business! Cut them loose, and you’ll
send ripples throughout your organization, shaking up other non-performers and
prodding average employees to aim higher. As a bonus, you’ll boost morale among
your top performers, because it shows that you’re paying attention and that you
value good work.
According to an
old Icelandic proverb, “Mediocrity is climbing molehills without sweating.” If
you want climb mountains, not molehills, develop a zero tolerance for
mediocrity. Use the 20%-60%-20% rule to keep your employees moving upward.