Inventory Your Employees Regularly

The title of this article sounds cold and impersonal. But it’s not meant to be. You and your people are the number one key to the success, or failure, of your business or work unit. Taking inventory of your employees simply means taking stock of the quality of your people in order assess:
1) how well you have been hiring,
2) how well you have been training them,
3) how well they are being managed and
4) how healthy your company is likely to be.

We readily recognize that virtually all businesses of any size have some marginal performers. Our definition of a high performing employee is someone who consistently meets or exceeds reasonable, but demanding expectations. Think about your business or work unit in terms of the performance level of your employees. How many would qualify under this definition? Marginal and weak employees are defined as those who consistently fail to meet reasonable, but demanding expectations. Also, there are employees that seem to have potential to be high performers, but tend to fall just short of qualifying as high performers for whatever reason(s). They are the employees that meet or exceed expectations most of the time but slide back occasionally. Then there are those that seem to drift between high performance and marginal performance more often and, therefore, fall into the category of inconsistent performers.

Other categories in which to place employees are:
1) those who have been promoted beyond their ability and are struggling in their current job, but performed well in their previous position and
2) people who have been promoted and have not proven themselves in any capacity within the organization.
The latter category is especially perplexing, but does exist in many organizations because these employees have either played the right games or because management hasn’t recognized or has ignored important deficiencies in performance.

So how should you go about inventorying employees? It will require either you or a group of people objectively evaluating your people based on the definitions offered above. Then we suggest doing an actual head count for each of the following categories:

  • High performers.
  • Potential high performers.
  • Inconsistent performers.
  • Marginal or weak performers who will never be high performers.
  • Employees that have been promoted beyond their ability and have virtually no chance of being high performers in their current position, but could be in another position with the company.
  • Employees that have been promoted beyond their ability and have not proven they can be high performers in any capacity within the company.

Ok, so you’ve done the head count. Now what? First of all, what does your inventory reveal about the quality of your work force? Does your company seem to be top heavy in marginal or inconsistent performers? What percentage of all employees are high performers or potential high performers? We like to use the 95/5 rule in terms of performance. Our philosophy is that businesses should strive to have 95 percent of their employees legitimately fall into the high performer or potential high performer categories. Without question, there are few organizations that can legitimately claim that they meet this target. It is our belief that to hit this target, businesses must do a lot of things very well in terms of hiring, training and managing employees.

Most businesses don’t do all three of these things consistently well enough to reach the 95% target. And most businesses don’t do a good enough job of “cleansing” themselves of employees that simply don’t have a good chance of becoming high performers in the jobs they hold. In fact, we would argue that there are too many organizations where the ratio is reversed. In other words they have 5% of their employee base represented by high or potentially high performers with the others falling into the other categories. And there are many more companies that fall somewhere in between this level and the desired target. How does your company or work unit stack up?