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The foundation of every organization

Posted: October 14, 2008 9:00 p.m.
Updated: December 16, 2008 5:00 a.m.
Organizations are built on people. The only true long-term competitive advantage any organization has is the people employed and working inside of it.

It could be argued that in many industries the business model has been established so that just about anyone could work in a company at lower levels and the company would be just fine because the organization's image was strong enough to overcome the so-so performance of the employees.

The people in an organization set the tone and attitude that creates the company culture. And, each of us has our favorite companies, some we tolerate and some we will never do business with. How we feel about these companies is almost always a result of our experience dealing with the people employed there.

What is not often recognized or understood is that to the customer, the employee they are dealing with at that moment is the company.

When an issue arises at the counter of a quick serve restaurant, the check-in desk for a car rental or while talking on the telephone with a company representative, do you want to be dealing with the best possible employee or the one that was hired because they needed a job?

Think about your own company. Whom do you want dealing with your clients and vendors, the best you can afford or someone who just needed a job, any job?

Very few organizations with less than stellar people do a consistently good job of taking care of clients without having problems in service, quality and client retention.

Hiring and keeping the best employees is always a challenge; finding fair employees is never a problem.

I believe that one very good employee is worth at least two, and possibly more, fair employees. If you follow baseball, all you need to do is look at the Los Angeles Dodgers. Having Manny Ramirez on the team and paying him a salary of $20 million sounds like a lot until you consider that Jason Schmidt and Andruw Jones make a combined salary of $29.9 million and neither of them contributed to the club in a meaningful way this season.

Today is a good a day as any other to decide to divide your employees by putting them into two categories: those that are very good and those that are fair. Put another way, who are your A and B employees and who are your C and D employees?

Regarding your A- and B-rated employees can you answer the question that the organization is paying them more than your C and D employees? If not, why not?

Does that mean you should fire those that you have rated C and D employees? No. What it means is that those employees need to have their performance reviewed and discussed.

It is probably time to sit down and explain to every C and D employee what they need to be doing that they are not and what they need to stop doing and get started doing to help the organization.

It doesn't have to be a difficult conversation. It can, in fact, be an enlightening one for both parties.

I was impressed by the actions that one owner took when he became frustrated with a key employee. He told the employee that it was time for her annual performance review and that she was to list her goals and then rate herself as to how she was doing on each goal. He told her that he would do the same and once they both had completed their independent assessments, they would meet and discuss their findings.

Once they sat down, several things were revealed. The first was that the owner had not been clear about telling the employee what his expectations were. The second is that the employee had assumed she knew what the owner wanted. Neither of them was wrong and neither of them was right. It was an issue of not communicating effectively with each other.

This misunderstanding was the source of his frustration and her belief that she was doing what her supervisor wanted. They proceeded to discuss closing the gap between expectations and execution and since that time, have worked well together.

Neither owners nor employees are immune from hearing the continuing bad news about the current economy. Hiring the best still matters. In fact, in a slowdown, every company should be looking at what it will take to keep their best employees instead of letting them leave for a competitor.

As for those C- and D-rated employees, wouldn't some of them serve you better by being on the payroll of your competition?

Kenneth W. Keller is president of Renaissance Executive Forums in Valencia. His column represents his own views and not necessarily those of The Signal.


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