It's no secret that modern businesses run on tight budgets, and funding for training and staff development can be scarce. When companies demand constant justification for every development dollar spent, managers struggle with the decision of where to direct their resources. Which employees will gain the most from added support and coaching, and how can you identify them?
Using Segmentation as a Performance Management Tool
One effective approach to assessing team performance is stack ranking, which divides the team into quartiles. Imagine a box plot representing the performance of your organization's staff on key metrics: The first quartile of top performers are at one end, followed by a segment of employees whose performance meets expectations, then employees who need improvement. At the far end are the team members who are truly struggling – the bottom 25 percent of your organization in terms of performance.
Too often, managers relying on metrics focus on this bottom quartile of employees – the ones who are far from meeting expectations – with goal-setting exercises, coaching and other management interventions
The real opportunity, however, lies in applying these tools to the middle segments, which represent half of the workforce, to help them perform as the top employees do. These two quartiles are rarely high-performing enough for leadership recognition or incentives, yet they are not far enough behind to warrant significant action or termination. They have clearly demonstrated some skills and interest, but they are not providing the highest level of value in the workplace.
Industry-leading organizations routinely focus their coaching efforts on second- and third-quartile performers who have the potential to become top performers. It's a philosophy that was embraced by Jack Welch, legendary former CEO of GE. Welch believed in the value of the mid-level performer: "You do not want to lose the vast majority of your middle [employees] – you want to improve them," he wrote in his 2005 book, "Winning."
Welch knew then what data and segmentation are only now proving: The middle group may very well include the next star performers who, with a little prompting, can become leaders. According to the Corporate Executive Board, companies tend to spend too much time coaching the top 20 percent and trying to improve the bottom 20 percent of sales and customer service representatives1. Focusing on the core middle is the best way to improve profits – for this group, high-quality coaching can improve performance up to 19 percent2.
Nurturing High-Performing Employees
High-performing employees share three universal characteristics, according to a Gallup study released last year: "Employees who hit the trifecta of tenure, engagement and talent perform 18 percent higher than the average employee and 35 percent higher than a worker who goes zero for three."3 Acquiring talented staff is a hiring and human resources question, outside the reach of many managers, but an on-the-ground supervisor has some real power over the other two factors.
Engagement and tenure can be nurtured in the easily accessible preexisting employee population. The team is already present, so managers and supervisors can work with individuals to develop realistic goals for improved performance4. By definition, these team members already have the benefits of on-the-job experience, including acquired knowledge of the company and industry. They are perfectly positioned to grow and prosper when given appropriate goals – and the tools needed to achieve them. By setting up short-term goals and having ongoing conversations surrounding them, the modern organization can reinforce the notion that anyone can become a top performer.Adam Aftergut is a product marketing manager for NICE Performance Management, the leading software solution used by contact centers to improve customer satisfaction scores (CSATs) while reducing contact center operational costs.
1 David Anderson, “What’s the ROI of Skill Development?”
CEB Global, https://www.cebglobal.com/blogs/whats-the-roi-of-skill-development-2/
2 Matthew Dixon and Brent Adamson, “The Dirty Secret of Effective Sales Coaching”, Harvard Business Review, https://hbr.org/2011/01/the-dirty-secret-of-effective
3 Jim Harter, “Companies Are Maximizing Only 5% of Their Workforces”, Gallup, http://www.gallup.com/businessjournal/182087/companies-maximizing-workforces.aspx
4 “Employee Coaching Workbook for Supervisors”, NICE, /engage/eBooks/Employee-Coaching-Workbook-for-Supervisors-24