According to new research by entrepreneurship and finance professor Steve Kaplan, and blogged about by Adam Jones on the FT Management blog, the biggest weakness managers have is a tendency to hold onto under performing employees.
While most of my career is directly due to this peculiar observation*, I did find it interesting that it was borne out by qualitative research by way of interviews with 316 “very” senior executives.
Why is that? According to Adam Jones, the same executives over indexed in “execution-related abilities – aggression, speed, persistence” versus the softer, more interpersonal, team-related skills.
Perhaps it is this aggression and persistence that leads managers to keep on under performers – it shows an overly macho belief that they can manage a damp squib into a world beater?
I’ve always been interested (and, quite frankly, scared witless*) of the Jack Welch 10 per cent rule which dictates that no matter what, every year you fire the bottom 10 per cent of employees.
In an industry where turnover is so prevalent, such as marketing, advertising or public relations agencies, how would this affect staff morale?
Clearly some turnover is good but if one agency routinely got rid of the dead wood in an unemotional detached way, would that attract top talent and clients or would it drive people away (both incumbents and potential hires)?
In an industry that relies so heavily on relationships, would such an unemotional approach to the work place be rewarded?
Putting aside the statistical impossibility of a small agency firing 1.7 of its employees, what do you think about this?
Should the tree be pruned or should the lower “branches” (in terms of performance not seniority) be nurtured?
* this is called being self-effacing.