Imagine you have 100 employees and I ask you to graph them in terms of performance. Most likely your chart will look like a bell curve: a small percentage of high performers on the left, a few poor performers on the right, and a ton of average performers in the middle. 

Yet as Laszlo Bock, the former senior VP of people operations at Google, writes in Work Rules: Insights From Inside Google That Will Transform How You Live and Lead:

Organizational researchers have shown, similar to the 80/20 rule, the majority of your company's output comes from a minority of "superstar" performers: What's known as a power-law distribution.

In performance terms, think of power-law distribution as a long tail of steadily lower performance. In visual terms, like this.

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Yet the standard bell curve underpins most HR systems. According to Bock, that means many leaders "undervalue and under-reward their best people, without even knowing they are doing it."

For example, I once rated all my employees as "superior," and for good reason: They were the most productive team in the plant. HR kicked my evaluations back and said I needed to distribute my evaluations more "fairly."

"Fairly," of course, meaning "bell curve."

That caused a few outstanding employees to be undervalued and, as a result, under-rewarded. Since pay was tied to evaluation ratings, they didn't get the raises they deserved.

Or the attention.

Put Your Best People Under a Microscope

Instead of focusing on what makes poor performers perform poorly, Google took the opposite approach.

Take leadership. Google used its analytical horsepower to determine how great teams are built and led. They found is that good managers produced reasonable results, but outstanding managers produced outstanding results. The result was a list of attributes shared by high scoring managers. (Interestingly, only one attribute involves a manager's knowledge, skill, and experience. The rest were soft skills: communication, feedback, coaching, teamwork, respect, and consideration.)

Then Google used those attributes, and the resulting evaluation tool, to develop more high-performing managers -- and especially to help those who were struggling.

That's one benefit of adopting a power-law mindset to employee performance. Instead of seeing superstars as outliers whose skills can't be replicated, identify what they do differently. Then use those insights to shift the curve farther to the right.

After all: Helping high performers become 5 percent better will pay dividends. But helping average employees increase their performance by 10 percent makes a bigger difference.

And helping relatively poor performers increase their performance by 20 percent makes an even bigger difference.

According to Bock, working to develop low performers can not only improve productivity and quality, but also serves another purpose. "People either improve dramatically," Bock writes, "or they leave and succeed elsewhere."

Then Pay Your Best People More

Most companies have pay scales. Every position is "worth" a certain amount, and eventually even the best performers top out. Makes sense. Pay should be "fair."

But "fairness" results in superstars making only a little more than average employees. And then, as Bock writes:

In a misguided effort to be "fair," many organizations underpay their best employees, producing the very unfairness they are trying to avoid.

And, more importantly, creating top talent turnover.

Instead, your goal should be to pay employees fairly by tying their pay to their contributions, output, and accomplishments. "Fair" shouldn't be based on "this is the most the job pays."

"Fair" should be based on "this is what you're worth."

As in this story from David Halberstam's The Breaks of the Game.

In 1974, eventual Hall of Famer Lynn Swann was the seventh pick in the NFL draft, but his agent negotiated the second-highest starting salary among rookies that year. Later his agent was pulled aside by Art Rooney, the owner of the Steelers.

"You think you screwed us, don't you?" Rooney asked the agent. "You're wrong. We got you. My son says he's not a good football player, he's a great football player. Probably the best draft pick we've ever had. Maybe better than Terry Bradshaw or Joe Greene." 

"Let me teach you a lesson, young man," Rooney continued. "You can never overpay a great player. You can only overpay a bad one. I don't mind paying a great player $200,000. What I mind is paying a $20,000 player $22,000."

The same is true for you. Great employees are worth much more than average employees to your teams, to your customers, and to your bottom line. Superstar employees are worth dramatically more.

Do what Bock recommends, and pay them unfairly. Pay them not just as if you want to keep them, but as if you desperately need to keep them.

Because you do.

Not only because they drive results, but also because putting their skills, attributes, and qualities under a microscope can can help other employees perform better, too.