29 May 2012
Turn round or turn out
It only takes one to wreck the entire team – so, asks Annie Gregory, what's the best way of dealing with poor performers
Underperformance is at a record high, according to Roffey Park's 2012 Management Agenda. The leadership institute attributes it to a combination of factors: an increased focus on performance in a tough economic climate; employees not coping well with extra pressures caused by redundancies and budget cuts; and – possibly – skills deficits. It advocates better support in overcoming performance issues as well as appropriate reward and recognition. It advocates stick as well as carrot: "Ensuring managers have the authority they need to tackle underperformance is critical, as is a supportive organisational culture with clear processes to identify and address [it]. Organisations need to understand the underlying causes of poor performance in order to determine what action is required to address them and send a clear message that underperformance is not accepted or tolerated."
On 6 April, the stick was probably given a little more force with the extension of the qualifying period for unfair dismissal from one year to two. To many people, including business secretary Vince Cable, it's a long overdue change to "a bloated and bureaucratic obstacle for employers and the taxpayer". To others, however, it provides a temptation to renege on the employers' side of the bargain: to support and encourage employees while they develop to meet the expectations of the business. It may even lead to a 'rip up and replace' mentality in areas of high unemployment.
In truth, underperformance can stem as much from management as workforce inadequacies. The set-up-to-fail-syndrome, first formalised by Jean-Francois Manzoni and Jean-Louis Barsoux in their brilliant book How Good Managers cause Great People to Fail is as pertinent now as it was when they wrote it a decade ago. The basic tenet is that poor performance is often the result of negative behaviour by managers themselves that gets replicated by their reports. In a highly condensed form, the process goes like this. Manager – rightly or wrongly – thinks he has spotted a poor performer and responds with much more control and direction than he gives to obvious high performers. Although he means to help, the victim feels he is a member of the Out Club and becomes hyper-sensitive to any communications – which only makes the manager step up his intervention. The employee feels he is not trusted, loses confidence, does not dare to ask for help or clarification even on complicated projects and may even cover up problems because he fears it will provoke even more critical attention. As a result, his work spirals downward which only confirms the manager's view. So the employee adopts a defensive or even adversarial attitude and his attitude begins to percolate to other members of staff. And the whole cycle begins again.
Familiar? Most of us have seen it to a greater or lesser extent. At its worst, this kind of 'helicopter management' can even look and feel like bullying, an accusation that would probably horrify managers who sincerely believe they are trying to help. Yet the whole situation often arises from nothing more complicated than a failure on the manager's part to state what is expected from the employee and to listen to the response.
Shortly, however, even a decent verbal exchange aimed at improving performance could have added dangers through the new government proposal of 'protected conversations', which will be aimed squarely at poor performers. Richard Taylor from commercial law firm Pinsent Masons is unconvinced: "Essentially, the intention is to enable the employer to have a full and frank conversation with the employee about their underperformance without the fear of those exchanges being used in an employment tribunal (although discriminatory statements will be exempt).
"No clear proposals have been made at this stage, but any legislation is unlikely to be straightforward and a number of commentators have suggested it will be unworkable in practice. Some critics have likened this to a bully's charter, whilst others have stated it will be a lawyer's charter. Whether these proposals will genuinely make it easier to dismiss employees for underperformance can only be gauged if and when consultations have taken place and the legislation has been drafted."
If that makes you nervous, you are probably right. At a purely pragmatic level, however, it may make the prospect of rehabilitation more attractive than removal. And it is worth remembering that converts are often the strongest believers. Martin Gummery of improvement consultancy Newleaf International is adamant that some of the biggest wins for an organisation come from turning a difficult person: "Usually, the difficulty occurs when a committed person develops a high degree of frustration and behaves badly due to not being able to influence/fix problems that are bugging him. These people may not have performance issues – they usually deliver the needs of the job or the business – but they get very frustrated that things aren't as they could be. They feel 'disabled' and 'dis-empowered'. Once these people are enabled and empowered properly, their performance takes off, and the behaviour issues disappear."
So how do you identify and coach the underachievers while avoiding the 'set up to fail' syndrome? To Gary Winstanley of Siemens Mobility, 2010 Best Factory winner, it boils down to one simple factor: "I genuinely don't believe anyone comes to work to do a bad job. Most people don't wake up and say I'm going to annoy everyone today. To get anywhere near that state of mind, they really have had to go through a period of disillusionment and disappointment at work. So if you can find the right job, with the right demands and the right skills – in theory at least – most people should be able to make a contribution to your business." In reality, he knows it's not always possible to mould people to what's available but his underlying principle is making the best of the people you've got through clear, fair expectations and management support.
He is supported in this by a group-wide emphasis on management standards underpinned by a modular training programme that gives managers at every level the wherewithal to avoid common pitfalls. It covers interviewing, managing sickness and absence, and – most tellingly – two-day courses firstly for spotting and managing underperformance and secondly, for developing improvement techniques to support positive performance. "If you are a new manager, it really helps because it gives you the tools to do things that don't come naturally," he explains. Cell leaders sit alongside directors on these courses; Winstanley has booked himself on both the underperformance and positive performance ones next month: "It will let me set an example, but it will also be very useful."
Siemens also understands that 'listening thing' that so many textbooks preach but so few factories practice. Indeed, its performance review process is actually called Staff Dialogue. Alongside hard targets like budget adherence, it considers 'soft' measures like how you've worked with people and embodies feedback from colleagues and internal customers alongside people's own view of their performance. There are preliminary discussions between employee and manager about everything that goes into the dialogue.
Siemens then uses a roundtable process to make sure appraisals are aligned fairly and consistently across the plant: line managers talk about each of their direct reports, the rating they have given them and why, and what they have achieved against key competencies. The whole process is directed at giving people a clear view of what they have done well and setting the targets and development plan for the next year.
It works because people know what's expected of them, how they can achieve it, what help they will get in developing the right skills and – bluntly – the consequences if they don't live up to those expectations. So what happens in the worst case? How does Winstanley, definitely a Mr Nice Guy who values his people, react to those who are never going to make the grade? "My philosophy is simple. We can change the people and make them behave differently or – if we can't do that – we can change the people. You can't let one bad apple spoil the rest of the barrel – it's too important and worth too much."
He has seen managers baulk at getting rid of someone because they are scared of upsetting people on the shopfloor: "But every single time we've done it, we've had so many people come back to us afterwards and say 'I don't know why it took you so long. I'm really glad you've done that'. The people who work with them every day know who's spoiling it for the rest of them. They are the ones who have to do more because someone near them isn't pulling their weight."
He went through a full-scale change-the-people exercise in 2008 but he admits it's never easy: "Redundancy can be managed fairly quickly. Managing people out for poor performance takes a lot longer. There's a whole process of 'here's where you've fallen down; here's what you need to achieve; we'll review it in three months and if you haven't achieved it by then, these will be the consequences'. What we do have, however, is the ability to move people to different areas. So if non-performers are in an area critical to the business, you can move them to an equivalently skilled job somewhere less vital. But it's shuffling the deckchairs on the Titanic. Most of the time, we say goodbye to people who are never going to be as good as we need them to be.
"But if you have a half-decent facility and a half-decent team, you should only be talking about a couple of people. If you are talking about half your workforce, you have been doing something very wrong and you are not going to exist in a year's time anyway." Winstanley says he would never shift problems elsewhere by giving someone a misleading reference about their abilities.
One important point from a business that is self-evidently a template for success: the guy who runs it is in full agreement with Gummery that the people you turn around can become your best performers. Siemens Mobility started on a massive lean reorganisation in 2006. Its resounding success brought the Best Factory win.
One of its worst set-up – and therefore biggest problem – areas was run by two long-servers who were definitely not onside for change. Elsewhere, they might have been prime candidates for removal. Instead, by creating opportunities rather than issuing diktats, by investing rather than criticising, cajoling rather than coercing and by supporting them in finding their own way forward, they rebuilt the area into one of the shining lights of the whole lean transformation. "They achieved fantastic savings; the area footprint shrunk hugely and productivity increased by 50-60%," recalls Winstanley. "They did it all themselves and since then they have become our biggest lean advocates." So try turning round rather than turning out.
If all else has failed ...
… Richard Taylor of Pinsent Masons' pointers for fair dismissal:
- Ensure that performance really is the only issue. Are there disability, childcare, bullying or excessive workload issues to consider?
- Ensure the underperformance has been properly investigated; the employee is provided with the findings of that investigation; and has an opportunity to respond.
- Have warnings been issued, making clear the consequences of a failure to improve? Has the employee been given the chance to improve?
- Consider alternative employment or demotion for the employee before taking the decision to dismiss (depending on your size and resources).
- At the dismissal stage, invite the employee in writing to a formal capability meeting. Identify the shortcomings in their performance and the steps taken to date; the procedure to be followed in the meeting; the possible consequences (namely dismissal) if performance has not improved to the required standard; and the right to be accompanied by a trade union official/fellow worker.
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