Smart leaders spend a lot of time thinking about how to keep their top performers. Following the Pareto Principle, 20 percent of a company's employees produce 80 percent of the organization's work -- making that 20 percent incredibly valuable.
A 2017 study by corporate training company VitalSmarts found this figure isn't too far off: High performers are responsible for 61 percent of their companies' work. In other words, they produce three times as much value as their peers.
In the best-case scenario, mid- and low-level performers in your organization admire their high-performing colleagues and seek them out for advice. In the worst-case scenario, your top performers resent your lowest performers for not carrying their weight.
How do you decide whether low performers are worth keeping? It's more complicated than you might think.
Separating the Wheat from the Chaff
While retaining high performers is a lofty -- and worthwhile -- goal, you can't let them dictate how you run your company. Immediately letting go of weak performers may eliminate valuable skills and ideas. Worse, if low performers aren't aware of their weak output, they'd be shocked by a dismissal -- and your remaining employees' morale would reflect that.
To assess whether a low performer has long-term potential at your company:
1. Figure out why the employee's performance is an issue.
In growing companies, it's easy to flag a low performer, assign him to shadow a more productive employee and expect things to resolve themselves. Adopting a "shape up or ship out" attitude becomes second nature to keep pace.
But that doesn't get at the root cause. You -- or the employee's manager -- should observe him working. Ask him to describe his thought processes as he works (but make it clear you're gathering information, not on an error-finding expedition). It may simply be that he doesn't understand the "why" behind your team's processes. It may be that his trainer skipped a crucial step. It may be that he tends to think in more theoretical terms, and application is a struggle. Every one of these issues is distinct and helpful in determining your next move.
2. Assess the employee's self-awareness.
It's one thing to be bad at a task; it's another to recognize it. Ask the employee what he feels he excels at in his work and where he'd like to improve. You may find he's really great at something the remainder of your team has trouble with, but he can't wrap his mind around things they find obvious. This is a sign you've filled a skills gap on your team -- you may need to reallocate work.
Go one step further: Ask how she knows she's doing well -- or not so well -- on a given task. Understanding how she's assessing her work will give you insight into how self-aware she truly is. Does she know she's underperforming because the team metrics show her dead last? Does she sense she's weaker than she should be at a process because she has to think through her reasoning for choosing Template A over Template B?
When I work with fast-growth companies from the Inc. 5000 list, they find letting their employees self-evaluate gives them more ownership over their work and their growth plan going forward. I've adopted this strategy with my team, too. It's increased our short-term effectiveness and increased employees' confidence over the long term.
3. Have a frank discussion about your low performer's career goals.
You have nothing to lose by getting honest. Find out what this employee's long-term career goals include. Why did they take the job? If they took it because your company is the best at software development, that tells you something. If they value a warm culture and felt drawn to yours, that tells you something else. Neither answer is wrong; it helps you see what's beneath the surface.
Best outcome: You discover your low performer's in data entry to get his foot in the door, but his skill set -- and ultimate goal -- resides in marketing. You may be able to transition him to a better-fitting role (if there's a need). Another option: You find out she wants to become the go-to in one specific area. As she works to improve her weaker areas, you may be able to shift responsibilities so each person becomes a specialist rather than a generalist.
The worst option: Your low performer isn't invested in what your company does or values -- it's a job to pay the bills. In that case, let them find a company happy to have their skills.
We spend a lot of time thinking about retaining our top performers, but what happens when low performers are part of that equation? Determining whether a low performer should stay isn't easy, but making an informed choice ensures you -- and your high performers -- will be happy with the outcome.