Utilizing the '20-60-20' Rule

I view our industry’s current evolution to be among the most pivotal in its history. And I firmly believe that strategic personnel management will be one of the keys for companies making a successful transition into a new era of sustainable profitability. Continuous strategic deployment of staff, however, isn’t such an easy task, especially when you also have a shop to run.

A theory called the “20-60-20 Rule,” however, might be just the thing you need. A simple, practical system of categorizing staff, the rule can streamline your ongoing assessment of your company’s human-resources requirements. Applying the rule effectively can help print shops work through their current economic challenges to achieve many positive outcomes.

Top, bottom, and middle
A review of the performance of practically any group of employees will divide the group into three categories: the top 20 percent, comprising strong performers; the middle 60 percent, comprising average performers; and the bottom 20 percent, comprising weak performers. Let’s take an in-depth look at each group.

Top 20 percent: These are your top performers. They reside in every corner of your business and are the cream in each area of your workflow. They: do their jobs well, understand what results are required of them, and have the skills to deliver them; have integrity and are honest; respect coworkers and customers; and work whether you are around or not.

As far as maintenance of your top 20 percent is concerned, since they are already doing fine, show trust by delegating responsibility to them appropriately. Let them take care of things themselves without constant micro-managing. Just check in with them periodically to find out what they need to do their jobs effectively and then provide it. Be sure to acknowledge them with appropriate distinctions and find ways to reward the strength of their contributions to your business. Otherwise, stay out of their way; don’t waste time fixing what isn’t broken. As far as retention is concerned, find ways to promote and challenge them as they desire, or else be prepared for the likelihood that these high achievers will leave you for bigger and better opportunities.

Bottom 20 percent: Here are your weakest performers. They aren’t productive; come in late and waste time or perhaps don’t come in at all; and need constant supervision. As your weakest and potentially most dangerous, error-prone group, these are the staff you need to manage most vigorously. Diagnose their problems, offer them remedial training, and opportunities to improve. But if all else fails, ditch them and hire new staff instead.

Middle 60 percent: Your average performers. They are pretty good at their jobs; do most of what they are supposed to do; and are nice people who are basically good employees. Business leaders should spend most of their time on this group—not only because it is largest in number, but also because it includes both promising talent in need of a chance to shine as well as bottom-feeders just waiting for their chance to slack off. Inevitably, once vacancies appear in either of your top- or bottom-20-percent groups, certain individuals from your middle 60 percent will migrate to one or the other extremes. The manager’s job is, first, to anticipate in which of these two directions the people in your middle-60-percent group are headed; and, second, to mentor and develop the best ones into members of the top 20 percent, thus filling your company’s succession needs.

Helping the cream rise to the top
Recently, I witnessed an encouraging example of these dynamics: A hiring manager at a facilities-management company came to me seeking someone for a key management role at an important branch site. The client asked my company to locate candidates who already held a number of years’ experience performing exactly the same function they required their new hire to do.

During our search, we identified a candidate who had the appropriate background and some of the required experience—but not the identical direct facility-management exposure required. In subsequent conversations with this promising candidate, however, we recognized that she had the foundation, as well as the critical desire and interest, to move from the middle 60 percent to the top 20 percent. In fact, she confided to us that this type of promotion was the precise career goal for which she was planning. So we introduced her to our client for consideration—and, ultimately, the company not only hired her, but after only a few short months, they formally recognized her for achieving success in their operations.

The greatest thing about the middle 60 percent is that the cream does indeed rise to the top, and this example is just one such illustration. This story also demonstrates why, even though many companies must currently undertake various degrees of downsizing in response to soft market conditions, we caution business managers against letting go of their middle-60-percent group wholesale.

Although flattening an organization may seem like a viable quick fix for cutting costs, making the mistake of eliminating your middle 60 percent rather that the bottom 20 percent might also eliminate your company’s future.

Letting the bottom go
I recognize that the prospect of evaluating, disciplining, and firing staff makes some managers squeamish. But, regardless, you must eliminate the individuals in your bottom 20 percent. Face facts: These non-contributors will never be more efficient nor embrace the expeditious technology of the future. At best, the bottom 20 percent are below average—and even average doesn’t cut it anymore, not in today’s challenging economy and definitely not in the quickly evolving world of print work.
If your company needs to downsize anyway in the current economy, so much the better—your bottom 20 percent gives you an obvious place to start.

Even in the best of times, management of strong organizations typically eliminate the lowest producers. One major US corporation, for instance, gained notoriety for insisting that every department manager annually rank his or her personnel and eliminate the bottom 10 percent of workers. A like-minded president of a dynamic Canadian company built his organization by terminating the lowest-volume sales representative every quarter. While these practices may seem radical, the theory behind them is entirely sound: Define and rank performance expectations, then take action based on the results.

You should, however, always perform due diligence before axing someone. You don’t want to brand an employee unfairly or falsely when appropriate mentoring or training could move them into the middle-60 percent group or even the top-producing 20 percent.

So, first follow standardized personnel-management practices geared to identifying and correcting poorly performing employees. Begin by creating job descriptions and performance standards for every one of your staff. Job descriptions are incredibly useful tools. They tell employees what’s expected of them and give you a standard for measuring each employee’s performance. If your measurement indicates that someone isn’t performing well, invest the further time and thought required to figure out why. Is lack of training the problem? If so, make training available. Is the poor performer a good worker, but poorly suited to his job? Then see if a more appropriate role can be found for him elsewhere in the company.

In the end, though, if you determine that, no matter what you do, you will not be able to assist the poor performer to become a genuine contributor, then it’s time to take decisive action: Fire him or her, following an appropriate protocol for your area’s prevailing employment laws.

Changing factors
A final note: Some employers keep poor performers around to compensate for the pending mass retirement of Baby Boomers. Indeed, many employers were concerned that there wouldn’t be enough people to replace that graying generation. But, lately, a combination of countervailing factors has offset the projected shortage of workers, including the high levels of productivity enabled by technology, leaner management practices to generate more profit-building efficiencies, and a decline in staff head count due to declining business volumes. These circumstances leave managers with less justification for retaining the bottom 20 percent of their staff.

Arnold Kahn is president of PrintLink (printlink.com), a leading staff-placement agency for print shops and the graphic arts. This column is adapted from information that first appeared on whattheythink.com and is part of a collection of columns that comprise Kahn’s new book, HR Bible for the Printing Industry, which is available in PDF format directly from https://store.whattheythink.com.