In most organisations I interact with, the greatest return on investment that can be made is in its people. The potential that exists in organisations is rarely less than a twenty percent increase in productivity as a result of applied creativity.

I continue to be concurrently amazed and saddened at the potential for productivity and creativity that is left untapped. Organisations typically allow human resources processes and procedures to become rituals and routines. The maxim that “people are the difference”, is a parody of itself as appraisal processes are paid lip service, training is used in a reactionary manner or not at all and career development owes as much to favouritism and politics as it does to talent and results.

There are many elements that make up the failure of organisations to realise the potential of their employees. The common central weakness, however, is a poorly developed and executed performance management system. The consequence is an almost imperceptible difference in the way we manage performance of our top, middle and bottom performers.

Jack Welch, in his book, “Winning”, referred to the 20:70:10 rule to illustrate the distribution in GE of exceptional average and poor performers. Jack Welch’s view was to create a very clear distinction of promoting, challenging, educating and monetarily rewarding the top 20% and letting the bottom 10% go. Working in GE, knowing that distinction was there, certainly would have stopped many of the 10% from demonstrating a lack of endeavour. More importantly, however, is the impact on the middle 70% and the top 20%.

The top 20% are motivated to continue to challenge themselves to do better and the distribution of the middle 70% skews closer to the top 20% than the bottom 10%.

The objective of managing all employees is to ensure that they: 1. Know what to do 2. Believe in what they do 3. Believe what they do well has a direct personal benefit to them 4. Have a personal connection to the organisation’s goal and strategy 5. Have a sense of belonging to their team and to the organisation as a whole which is as strong as their sense of belonging to family and friends

Differentiate when you manage performance

A performance management system that does not differentiate the manner in which the top middle and bottom percentiles are managed attacks the ability of an organisation to deliver on all bar objective number one.

A successful performance management system requires much more than an appraisal system and the ability to hire and fire people. Good performance management systems have five elements.

Elevation of the performance management system to prime importance

A performance management system which is seen by employees as a ritual or routine is the most common element in organisations with unrealised potential in their people.

It is not the design of the documentation or the frequency of the appraisals that demonstrate the health of a performance management system. It is the importance placed upon it by senior management. For example, senior managers who allow appraisals to be done poorly with generic comments and inconsistent application of evaluation criteria or in many cases not at all, send a powerful signal that performance management is unimportant. Senior managers who allow training designed to improve an employee’s performance or potential to be cancelled or postponed continually for operational reasons send a clear signal that individual development is unimportant. Senior managers, who allow poor behaviour to go unchallenged because they are afraid of confrontation, send a powerful message that behaviour and hence the values of the organisation, is up to the individual.

All levels of the organisation must understand by observing the actions of their leaders that individual performance and behaviour are key elements of organisational performance and are not to be compromised. Performance management must have the same attention as financial management.

Employee engagement

Without employee engagement, there is no common sense of purpose, no common sense of acceptable behaviour and no common sense of what each employee’s role is.

To know that your employees are engaged, look for evidence that they:

  1. Understand the goal and strategy of the organisation and their role in executing the strategy.
  2. Believe and accept that they have a specific role in delivering the goal by executing the strategy.
  3. Care about the goal and strategy being executed and the roles that their colleagues play in executing the strategy.
  4. Plan their work with obvious intention to deliver the goal by executing the strategy.
  5. Implement activities which help execute the strategy.


The tools available to get employee engagement are many and may include:

  • Mission, vision and values statements (make sure that they have a clear meaning and are specific to your organisation and your operating environment or they become part of the problem, not the solution).
  • Verbal communication: one-on-one, one-to-many, workshops, roadshows.
  • Written communication: emails, newsletters, posters (use cartoons for effective communication.
  • Organisation and division level strategy and planning days and their accompanying documents.
  • Away days for middle management.
  • Workplace improvement meetings.
  • Job descriptions written for employees, not the HR system.
  • Individual leaders building rapport with individual employees and teams.


Use of the full coaching range by managers

The performance management system must encompass the training of managers at all levels to use the complete coaching range viz:

  • Educate people who do not know what they have to do or how to do it.
  • Encourage people who are learning to do new tasks, reward people who have shown capacity to learn new tasks or execute existing tasks well.
  • Sponsor high performers to stretch their capabilities, thereby maximising their learning and sense of self achievement, reward them by a magnitude greater than good performers.
  • Counsel people who have a consistent poor performance.
  • Confront people who have poor behaviour.


Managers must have the full coaching range applied to them by their managers in the context of their willingness and ability to use the full coaching range.

Unbiased, fact-based evaluations

Evaluations of performance and behaviour, be it by way of a regular formal appraisal, or the immediate on-the-job coaching opportunity, must be based on facts.

Evaluations have a quantitative job requirement element and five qualitative elements:

  • Quantity of work: Meets deadlines and output expectations.
  • Job Knowledge: Understands duties and has required skills to execute to standards.
  • Initiative: Begins and completes assignments on own.
  • Dependability: Reliably completes assignments and responsibilities.
  • Adaptability: Accepts and understands new methods and approaches.


The quantitative job requirement element must have a measure which has been cascaded from the goal of the organisation, must be easily understood, must be believed by the employee to be under their influence and must be believed by the employee to be reliably measured.

Development of employees

Development of employees begins with their induction. During induction the leaders of an organisation have a not to be repeated opportunity to shape the sense of purpose of the employee in delivering the goal of the organisation by executing the strategy of the organisation. Within six weeks of starting a new job people evaluate the leadership of the organisation and their commitment to achieving the goal of the organisation. If the new employee determines that the actions of the leadership are incongruent with the stated goal, strategy and values, disengagement sets in and it is difficult to remove.

Employees can do anything as long as they have the competence, the information, the authority and the resources required to do what is necessary. Developing employees includes all of the aforementioned elements. Employees may be developed by training or by increasing their authority or giving them responsibility of more resources or giving them the responsibility to use privileged information.

Employees can be developed using all or some of the elements by staying in their current position, being put onto a project team or by making a job or career change. What is important is that efforts are made to develop all employees, not just the top 20% and not just by making a job or career change.