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High Performers Purge the Unproductive

High Performers Purge the Unproductive

Mark Vickers | i4cp

September 08, 2010

Sometimes patience is not a virtue, and high-market performing firms know it. They get their employees ready quickly, they avoid employee stagnation and they weed out those who don’t come up the productivity curve.

i4cp’s new member-requested study on Time to Optimal Productivity shows that over half (55%) of respondents from low-performing organizations report that employees often remain in positions after their productivity has begun to wane. That’s true for only about a fifth of those from high-performing firms.

This kind of stagnation might contribute to crippling the U.S. economy as a whole. U.S. productivity took a nose dive in the second quarter of 2010 for the first time since 2008. Corporate profits are up but, being cautious about the future, companies remain reluctant to make new hires. Some observers think U.S. employees are too stretched to keep making productivity gains. And since lean operations mean relatively few promotions or even lateral transfers, many have been at the same jobs for far too long. “Well over a third of respondents to our new study say employees often stay in their jobs after productivity is on the decline,” notes Jay Jamrog, i4cp’s Senior VP of Research. “Add that problem up across the whole economy and it could have disastrous effects.”

High-performing organizations, by contrast, tend to move faster – even in a slow economy. When participants were asked about the time to full productivity in their companies, 45% of those from high-performing firms said this occurs in 12 months or less, compared with just 32% of those from low-performing firms.

“There are plenty of ways to shorten time to full productivity,” notes Jamrog. “Better employee orientation and onboarding, job shadowing, better access to informal learning tools, improved peer coaching and, generally speaking, higher-quality learning and development programs. It all adds up and results in a faster track to full individual productivity.”

In spite of the potential productivity gains, the study also found that many companies don’t even bother to track time to full productivity. In fact, only about six out of ten organizations use this metric, and high performers are no more likely to use it than the average company.

The important differentiator is that, when they use this metric, high performers use it more effectively. Specifically, they’re much more likely to make both termination and recruitment decisions using time to productivity as a factor. “With high-performing firms, it’s all about making sure you have the right talent,” says Jamrog. “They’re more likely to use that metric to get rid of less productive people, and they’re likely to use it to gain insights into who to recruit. In other words, they’re more structured about who to bring in the door and, if necessary, who to release.”

The i4cp study also asked companies about “maximum time in position,” which we defined as the maximum amount of time that employees can stay in the same position before their productivity falls off from the optimal level. We found that this is not a common metric in today’s organizations, with over half of participants saying they don’t estimate or calculate it for any positions. Although typically more rigorous in collecting workforce metrics, higher performers are actually less likely to measure this than lower performers.

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