Removing the Bottom 10% of Company Employees

Removing the Bottom 10% of Company Employees

img_6361By Larry Oscar

With beer in hand a friend of mine asked our eclectic group of old fogies one afternoon about the business practice of removing the company employees that are on the bottom 10 percent of company performers on an annual basis.

This is a common practice in business. One of one of the best CEOs in history, Jack Welch of GE, discusses this in his book Straight From the Gut. It may seem like a cruel thing to do to the bottom company performers, but in reality it is a must. For one thing it is not fair to the other 90 percent by making them carry the poor performance of those in the bottom 10 percent. And upon a close examination good business management requires you face the reality of the situation. It was W.E. Deming, the father of the quality movement in the 1970s -1990s that said that all workers want to do a good job. With that in mind a good manager needs to ask the question “What causes the bottom 10 percent to fail in their job performance?”

Nobody wants to be a drag on the other employees in the company. It is demeaning to your self esteem. So what is the problem? The answers to that question are as varied as the personalities of the people. Many are simply not in a job that gives them enough satisfaction to perform well. Some have been put into jobs that they do not have the education, skills, or talent to accomplish. They may have taken the job because it pays well, or they may have assumed it was going to be more satisfying than it turned out to be. This is not a new problem.

The grass is always greener on the other side of the fence. In the early 1970s I was working in outside sales for The Foxboro Company. The company manufactured instrumentation and control systems for the process industries. They were a leader in quality products and the technology of the time. Shortly after I joined the company one of our other employees in outside sales left for a position closer to his home. Our office manager hired a young engineer from Sun Pipeline Company to fill the vacancy. Buddy was a good engineer and had always wanted to see what outside sales was like. It was a job that attracted him. After all it came with a company car, an expense account, and you were not tied to a desk all day. All in all this was a well paying attractive position. What more could you want?

Well Buddy lasted a little over a year before he returned to Sun Pipeline. He told me that at Sun Pipeline he could leave his desk and go home to his family. The outside sales job here was a 24/7 business. Even when he was at home his mind was constantly thinking about the job. His performance reflected the stress of the job. It wasn’t that Buddy could not do the work. It was that the work required a sacrifice that Buddy didn’t want to make. And not many people can fit into this type of job. It can be a home wrecker.

Buddy became a Vice President for Sun Pipeline and today he has his own consulting business. He has had a fruitful and successful career. Hats off to Buddy. He possessed the ability to recognize that he was not cut out for outside sales and took appropriate steps to rectify the situation.  This brings us back to the problem of the bottom 10 percent. You see, many people are not as smart as Buddy. They continue in a position they will never succeed in. They need a push. Companies are not government social programs or government agencies that let people become zombies in their work. This is one of the reasons why our government agencies have so many problems in performing.

Company managers are not doing the bottom 10 percent any favors by tolerating poor performance. The best thing a good manger can do is face the reality of the situation and let them move on. They may not realize it at the time, but the absolute worst thing you can do to an employee is allow them to stay in a position that they cannot perform in. The same goes for people who own their own businesses. They start a business and soon become trapped in the situation after they discover that the business they thought was going to be great simply is not.

Your work should be satisfying to your soul. You should have a sense of accomplishment when all is said and done. If not, make a change. It is better to have tried and failed than not to have tried at all. And just because you fail at something does not mean you will fail at everything. Many times you can learn from failures better than successes. Humans are adaptable. The risk of failure is a fact of life, but it should not be a roadblock to our Constitutional right to pursue happiness.