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Employee Surveys Increase People Performance:
The Ultimate Competitive Advantage

Overview

After decades of reengineering and downsizing, most businesses are still inefficient. One of the most effective ways to increase business performance and profit is to increase the performance of employees, from the lowest levels of the organization to senior management, and little has been done in this area. Raising the level of performance of the weakest performers in each job category can have a dramatic impact on the profit of any company. While many companies are focusing on technology and strategic solutions to expand profit margins, opportunities to increase staff performance are frequently overlooked.
People are the most important asset of any organization. Fielding a winning team is critical to the ability of any company to compete effectively and to thrive, and top performing people are the foundation of winning teams.
Online employee surveys are one of many effective tools for identifying opportunities for increasing the performance of employees. Online employee engagement surveys/online employee satisfaction surveys identify a wide range of specific things that can be done to increase employee satisfaction and engagement, as well as pinpointing needed training and resources, ineffective managers and other drivers of individual performance. Employee surveys tell you if performance evaluations are effective and fair, and if they are adding value in strengthening employee skills, competencies and performance.
Graphic of People Performance GapŠ

The People Performance Gap©

There is a huge gap in performance between the strongest and weakest staff performing the same or similar jobs in most organizations. We call this performance differential the People Performance Gap©. The People Performance Gap© is typically 25%-100% in simple jobs and as much as 500%-1,000% in complex and high-responsibility positions requiring broader and higher-level skills. To illustrate this point, the Chief Information Officer of a leading company told us that "my best programmers produce ten times as much code, of better quality, than my least-effective keepers." He then went on to say "there is little correlation between what our programmers produce and what they are paid." Closing the People Performance Gap© can provide breakthrough increases in profit at most companies, even if their profit is already at all-time high levels.
Managers and the strongest performers often spend much of their time fixing problems caused by the weakest performers. This creates an enormous drag on organizational performance and serves to de-motivate top performers, a situation few organizations can afford to tolerate.
Let's look at another example of the People Performance Gap©. At a bank with seventy-five geographically dispersed branches, there were two hundred branch staff members whose job was to sell products and provide customer service. The bank encouraged these people to sell consumer loans and measured results of each person. The consumer loan sales results for one recent year clearly illustrate the People Performance Gap© concept (the results are for people who were employed in their positions for the entire year recorded). The top five performers each submitted over 175 loan applications during the year, averaging almost one application per day. The overall average number of consumer loan applications taken by the two hundred sales people for the entire year was twenty-five, well under one application per week per employee. The bottom 25% of the sales staff (50 people) each accounted for five consumer loan applications or less for the entire year, with almost half of this group registering no sales at all. The measurements were collected by a central loan processing group, and they were not shared with the branch managers and sales staff. Prior to identifying this People Performance Gap© opportunity during a performance review of the bank, the leading producers received minimal rewards for achieving top levels of performance. The weakest performers faced no consequences for their poor performance.
The People Performance Gap© concept also pertains where there only is one person in a job (e.g. President or CEO). The person in the job can not be measured against others currently in the job, but their performance can be measured against peers in other similar companies, against their predecessor's and against performance goals they and others (e.g. board of directors, stock analysts, shareholders) have established for the job. By any reasonable measurement, during the 1980's and early 1990's many Fortune 500 CEOs performed at the lower end of the People Performance Gap© spectrum. They continued to manage within the old paradigm while the 'new-world order' in competition and technology was rapidly developing around them. Many boards finally faced up to the problems and hired replacement CEO's to get their companies back on track, often with very positive results.
Closing the People Performance Gap© enables organizations to get more done with fewer staff and to significantly improve quality and customer service. For many companies, the bottom line impact of the People Performance Gap© is huge. Ineffective sales calls translate into lost opportunities. Based on a wide range of consulting reviews, we have found that twenty to thirty percent of a company's staff cost, including management and employees, is spent fixing things, performing rework, correcting errors and handling customer complaints because something wasn't done right the first time. Most of this excess staff cost is due to errors produced by people. Even when the cause of a problem can be traced to a failure in technology, there is a great likelihood that an error, lack of action or poor judgment on the part of people caused the technology to fail.

Technology, Reengineering and TQM are not Enough

Most companies have invested heavily in technology, reengineering and total quality management to increase performance. Some of these efforts have achieved major increases in performance while others have fallen short of objectives. In most cases, significant opportunities for performance improvement remain long after the projects and initiatives are completed. The reason is that wide-scale differences in the performance of individual employees continue to exist after processes and technology are upgraded.
Many of us are familiar with the modern supermarket. Optical scanning of product codes by cashiers, along with the ability to take credit and debit cards has increased the performance of cashiers across the board. That said, try taking the same cart filled with $42.87 (or any other amount) of groceries through each of the twelve cashiers currently open. You will experience twelve very different situations even though everyone is using the same equipment and supposedly following the same processes. Some of the cashiers move the items over the scanner faster than other cashiers do. Some make sure the glass cover on the scanner is cleaned so all items can be read accurately on the first pass. When a product code is missing or wrong, some cashiers know exactly what to do while others helplessly try to cope with the problem and then have to call for help, adding significant time to your transaction, and the waiting time of other people in line behind you. Some of the cashiers are highly effective in dealing with debit and credit card problems, and handling coupons and special store discount identification cards. The most effective cashiers can bag the groceries twice as fast as the slowest cashiers. Some cashiers are friendly, some aren't. Depending on who the cashier is, you can have twelve very different experiences while being handled by what is supposed to be a standardized process. The conclusion: effective technology and processes are extremely important, but people make the difference.

Picking a Winning Team

Imagine ten kids coming together to play a sport, any sport. The kids know each other and have played together many times before. Is there ever a question about who the captains will be? Of course not, the two best players will be the captains and everyone knows who they are. When it comes to picking the teams, about the only thing that isn't known is which captain will get to pick first. Once the coin is tossed, it is clear as to which person will be chosen first, second and so on down to the tenth player. Some of the kids may not like the order in which they are chosen, but they all know the selection process and accept that they are picked based on their relative ability and value to the team. Depending on the particular players, there usually is a wide range of ability and performance on each of the chosen teams.
Now let's think about the teams that come together to make up our companies. A team may have seven accounting clerks, twelve engineers, five cashiers, fifty customer service representatives, nine computer programmers, eight sales people, twenty-six manufacturing specialists, eleven bond traders or any number of people performing similar jobs. If the teams have worked together for a while, the team members all know each other's strengths and weaknesses, as well as whom the top, middle and bottom performers are.
As in sports, corporate managers and team leaders should have a clear understanding of the relative performance of each of their players. While some corporate managers know the performance of each of their people, many do not accurately measure and assess the performance of their team members. Of equal importance, those managers who have performance measurements often avoid or have difficulty using measurements as a tool for increasing the performance of their people.
All managers should ask themselves every day, is my team a winning team and do I have the right players, playing at peak performance to win? If the answer to these questions is no, or I'm not sure, what can be done to increase performance of people and create a winning team?

Closing the People Performance Gap©

There are a number of actions that can be taken to identify and close the People Performance Gap©. The most important step comes first, understanding that the People Performance Gap© exists and that management can take action to close the gap. Following are fifteen action steps that managers can take to quantify and close the People Performance Gap©:
  1. Identify the success factors and desired results for each position.
  2. Establish and communicate meaningful standards of performance excellence. The standards should guide behavior to achieve desired results. Communicating effectively with customers is not a performance standard. Establishing a goal of 98% customer satisfaction as a result of effective communications and other positive behavior/actions is the kind of meaningful, measurable standard we are talking about.
  3. Measure staff performance based on the performance standards.
  4. Share the results of the ongoing performance measurements with staff on a frequent and consistent basis and use the measurement results to define the areas of performance that need improvement.
  5. Provide positive leadership and management. Many people perform poorly at least in part because of weak management above them.
  6. Design jobs to be broad and flexible. This will help facilitate teamwork and enable you to get more done with fewer people.
  7. Provide training to ensure that all team members have the required skill sets to succeed.
  8. Make it clear to the staff that individual performance and teamwork is critical to the success of the team and the company.
  9. Before hiring, promoting or transferring staff, make sure there is a high probability they can succeed with a reasonable amount of training.
  10. Tie compensation closely to performance.
  11. Place employees first, customers second and shareholders third. Satisfied, competent staff will ensure that customers and shareholders are taken care of.
  12. Strengthen the recruiting and hiring process to increase the odds of hiring strong performers.
  13. Use a defined probationary period (typically 90 days) to evaluate new hires and cull out the weak performers before they become permanent fixtures. Many companies have probationary periods; few use them.
  14. Start now to identify the weakest half of your staff and to increase their performance. Some people will respond well to clear expectations and feedback on their performance. Others will need more training. A few individuals may need to be prodded occasionally to keep their performance on track. There are some people that will not bring their performance up to the required level, period, no matter what is done to help them. Following your company's performance management process, do everything possible as quickly as you can to eliminate the marginal performers from your organization. Replace them only if you really have to.
  15. Establish clear priorities and eliminate inappropriate conflict from the work place. Do everything possible to eliminate competing agendas.

Management's Role

We frequently hear from managers at all levels about their difficulty in finding the right people and their inability to get the necessary support from their Human Resources department in dealing with poor performers. Human resources people, on the other hand, often talk about managers who are ineffective at selecting the right people and who avoid dealing with people performance issues at all costs. Human resource managers sometimes point to the fact that they have all of the necessary performance measurement and pay for performance policies and procedures in place. Now it is up to the managers to use the process effectively.
There is an important role for both managers and human resources in increasing overall people performance. Working as a team, they can create and implement effective approaches to ensure that staff performance is appropriately measured and that closing the People Performance Gap© is a top priority for everyone in the company. Ultimately it is management's role to measure and increase people performance and to put in place a winning team.

Lessons Learned

Raise the bar. If you expect higher levels of performance from people and let them know what is expected of them, more often than not you can achieve the results you target for. Here are ten lessons that top performing companies have learned:
  1. Avoid arbitrary and across the board staff reductions. These actions usually produce unanticipated results that negatively impact customers and the ability of organizations to perform effectively. Many of the best people leave, requiring greater reliance on the people least able to help the company thrive going forward.
  2. Management must lead the way in achieving breakthrough increases in performance and positive lasting change. Don't expect people to improve performance on their own; in most instances it won't happen.
  3. Start now to identify and increase the performance of your weakest staff. Start with the bottom half of the staff since this is where the greatest gains can be achieved.
  4. The performance of every organization can be improved significantly. The first step in increasing performance should be to gain a clear understanding of current performance levels and the reasons performance is where it now is, and not higher. This will help your company avoid costly performance improvement actions that solve the wrong problems and produce little or no improvement.
  5. Achieving breakthrough performance improvement requires integrated solutions that address a combination of people, process and organizational issues. Reengineering and total quality management initiatives often fail to address the important people performance issues.
  6. Not everything in an organization needs to be fixed or changed. Management's focus should be on identifying and fixing the things that need to be fixed in order to increase performance.
  7. To achieve peak performance, staff members require effective processes, technology and policies, along with ready access to the right information.
  8. The best technology in the world cannot compensate for inefficient processes or ineffective staff.
  9. Some of the most important drivers of corporate success include providing top-down leadership, establishing and communicating aggressive and clear goals, implementing appropriate measurements and feedback, minimizing conflict and getting everyone to share a common agenda.
  10. Managing change effectively requires determination, lots of communication, careful planning and quick implementation. This is especially true when large-scale change is happening.

Summary

Companies can sustain the profit growth rates of recent years by strengthening the performance of their people, especially their least effective and marginal performers. Closing the People Performance Gap© can be the next frontier for corporate performance improvement. It really is possible to get more done with fewer people and to do a better job when you field a winning team. Most importantly, customers will know the difference in people performance and they will act accordingly. Satisfied customers will buy more, remain loyal and recommend your company and its products more often.
For many companies, closing the People Performance Gap© can mean the difference between thriving and mediocre bottom line performance. For others, closing the People Performance Gap© can mean the difference between business success and failure.
Most of us agree that a winning professional sports team attracts more fans (paying customers) and revenue than a losing team. Creating a winning professional sports team requires strong performers in all positions including players, coaches and front office management. Is this any different in corporations? As in professional sports, corporate performance and success requires fielding a winning team and closing the People Performance Gap© is critical to fielding a winning team.
In sports, all of the important performance measurements are in place, both at the individual and team levels; wins and losses, points scored, errors made, assists, batting averages, field goal percentages, the number of sacks made, earned run averages, and so on. There is no place to hide. Everyone can see what is happening. Performance, both good and bad, is noticed.
Companies must also create an environment where there is no place to hide poor performance, and manage knowing that peak performance of all team members is critical to the success of their company. Establishing meaningful standards of performance excellence and measuring the important results factors for everyone in your company will ensure that there is no place to hide. Using performance standards and measurements to increase individual and team performance is the next step in closing the People Performance Gap© and achieving breakthrough increases in company performance. This holds true for companies of all sizes in any industry.
Quantisoft's surveys enable you to measure and manage People Performance Gap© opportunities in your organization.
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