The biggest opportunities lie
in your absolute worst and best employees.
Help those in need.
What most organizations miss is that
people in the bottom tail represent the biggest opportunity to improve
performance in your company, and the top tail will teach you exactly how to
realize that opportunity.
Jack Welch popularized
the “up or out” model of management described in the first pages of this book,
where General Electric employees were rated each year, and the bottom 10% were fired: You either moved up in the organization or you were moved
out.
But isn’t there a cost
to this? It takes time and money to recruit new people, who often are more
expensive than current employees and who need to learn the new jobs — and even
then may not succeed! In a study of over a thousand research analysts at
investment banks, Professor Boris Groysberg of Harvard Business School found
that “star analysts suffer an immediate and lasting decline in performance”
when they move to a new company. Their prior success had been dependent on
their coworkers, resources available to them, their fit with the company’s
culture, and even the personal reputation or brand they had built up.
In an ideal world, you
would have hired all the right people to begin with, and if you’re running an
objective, well-calibrated hiring process, you’re probably pretty close. But
even then, you will make mistakes, and those people will sink to the low end of
your performance curve.
At Google, we regularly
identify the bottom-performing 5% or so of our employees. These
individuals form the bottom tail of our performance distribution. Note that
this happens outside our formal performance-management process. We’re not
looking to fire people: We’re finding the people who need help.
Read NextI confess that we don’t
have a reliable absolute measure for performance for every job, and we don’t
force a distribution of ratings, because different teams perform at different
levels. It would be madness to force the manager of a team of all superstars to
rank someone as failing. So this is a human process, not an algorithmic one,
where managers and the People Operations team look at individuals. In practice,
the bottom tail does end up including those who “need improvement,” but it also
captures “skimmers,” people who have been skimming along the lower end of
meeting expectations for a long time. Because we track the 5% only at
the highest organizational levels, some groups end up with no one in
this group and some end up with more than 5%.
We wondered if we should
be firing these performers, as many other companies do, but that would have meant culling 20% of our
employees each year (5% each quarter). It would also have implied that
our hiring approach wasn’t working. If we were successfully screening for
people who are more than “brains on a stick” — brilliant, adaptable,
conscientious Googlers — we shouldn’t need to conduct regular cullings.
So rather than following
the traditional path of making “poor performance” the kiss of death, we decided
to take a different approach: Our goal is to tell every person in the bottom 5% that they are in that group. That is not a fun conversation to have.
But it’s made easier by the message we give these people: “You are in the
bottom 5% of performers across all of Google. I know that doesn’t feel
good. The reason I’m telling you this is that I want to help you grow and get
better.”
In other words, this isn’t a “shape up or ship
out” conversation; it’s a sensitive talk about how to help someone develop. A
colleague once described it as “compassionate pragmatism.” Poor performance is rarely because the person is
incompetent or a bad person. It’s typically a result of a gap in skill (which
is either fixable or not) or will (where the person is not motivated to do the
work). In the latter case, it could be a personal issue or a useful sign that
there is something bigger wrong with the team that needs to be addressed.
In fact, the way we de‑emphasize role-related
knowledge in hiring leaves us a bit vulnerable to this issue, because we like
to hire people who may not know how to do a job. We have faith that almost all
of them will figure it out, and along the way are more likely to invent a novel
solution than someone who’s “been there, done that.”
When they don’t, we
first offer a range of training and coaching to help them build their capabilities.
Note that this is very different from the typical approach of hiring people and
then trying to train them into being stars. Our interventions here are for the
small handful of people who struggle most, rather than for everyone. If that
doesn’t work, we then help the person find another role within Google.
Typically, this results in the person’s performance improving to average
levels. This may not sound like much, but think about it this way: Out of a
group of a hundred people, Jim was one of the five worst performers. After this
intervention, Jim was about the 50th best performer. Not a superstar,
but Jim is now contributing more than 49 other people, where before he
had been better than only three or four people. What would your company be like
if all the worst people got that much better? And if even the bottom 49 were still better than the competition?
For the remaining
people, some choose to leave and others we need to fire. It sounds harsh, but
they tend to end up happier because we’ve shown sensitivity to their situation
and invested in them along the way, and we give them time to find an
organization where they can excel. I once had to terminate someone who worked
for me, who upon exiting told me, “I’d never be able to do your job.” I said,
“You can, but at a place where the demands are different.” Three years later,
he called me to share that he’d been promoted to chief human resources officer
of a Fortune 500 company, and was thriving. He said the pace was a bit slower
than Google, but it fit him perfectly. And he’d been able to become a trusted
counselor to the CEO precisely because of his measured, thoughtful style.
This cycle of investing
in the bottom tail of the distribution means your teams improve...a lot.
People either improve dramatically or they leave and succeed elsewhere.
From the book WORK RULES!: Insights from Inside Google That Will Transform How You Live and Lead. Copyright
(c) 2015 by Laszlo Bock. Reprinted by permission of Twelve/Hachette Book Group,
New York, NY. All rights reserved.