This truth of human behavior is at work in your business whether you know it or not. The only question is whether it is helping you or hurting you. Here are three simple strategies for getting it working in your favor:
First, be clear where you are setting the bar. People talk about the 80/20 rule. Research shows that it’s typically closer to a 16/60 rule. The top 16% of employees will generate about 60% of your gross margin. The next 68% of performers, the fat part of the bell curve, typically produce another 60% of your results. If you’re doing the math with me, it becomes clear that your poor performers are actually costing you money – about 20% to the bottom line.
The clear implication is that if you are asking your employees for referrals, or if you use your employees as ambassadors to potential candidates, choose carefully: the majority of your employees will convey messages about your standards that are appealing to average performers. If you get your top performers telling your story, they will be like magnets to those candidates who share their higher standards.
Second, you attract what you tolerate. What I mean by that is that if you accept average performance, you will attract average performers. But there’s another implication: If you or your managers allow ‘average’ performance to be acceptable, your top performers will do one of two things. They will either leave, or they will relax their standards and succumb to the culture of mediocrity. Either way you lose. On the other hand, if you raise the bar and enforce high standards, weak performers will feel uncomfortable and leave, while your top performers (who prefer to be surrounded with people like them) will promote your openings to others who share their attitudes. You will have kicked off a virtuous cycle.
Finally, you must look in the mirror. Would you work for you? Have you created an environment that is attractive to the high performers who will take your business forward? Are you an employer of choice, one of convenience or one of last resort? You need to be just as clear about where you set the bar for yourself as you are about where you set it for others.
This self-check must include an audit of your management team and the culture they foster. Managers who are abrasive, who don’t engage their employees, and who don’t treat others with respect are talent repellent. Your high performers have the most options and they won’t put up with it. They will bolt at the first opportunity.
This article was written by Jan van der Hoop, President, Fit First Technologies, Inc. Jan can be reached via e-mail at [email protected]