Bosses keen to cull low-performing staff

Jan 12 2007 by Nic Paton Print This Article

More than three quarters of British senior executives would like to be able to sack a fixed quota of underperforming workers each year, arguing that an annual clearout would lead to improved profits and better performance.

A study by talent management consultancy Hudson has found British businesses struggling to get rid of underperforming staff.

The poll of 562 "C-suite" executives and senior managers found the main barrier stopping business leaders deliberate taking an axe to their workforce was fear, and the worry they might leave themselves short of talent in the future.

It seems that a large number of UK bosses would like to take the advice of GE's former CEO, Jack Welch, and introduce annual targets for dismissal of underperforming staff.

Welch famously advocated firing the bottom-performing 10 per cent of staff every year, saying "if you've got 16 employees, at least two are turkeys."

One in six British executives believed they could target up to a fifth of their workforce without damaging productivity and morale, the Hudson research found.

Almost half felt dismissing five per cent would be positively healthy.

Last year Steve Ballmer, chief executive of Microsoft, caused a stir by admitting to a conference at the Institute of Directors that each year he "culls" one in every fifteen of his company's employees.

He suggested all businesses, large and small, would benefit from such an approach.

The main advantage identified in the Hudson survey from releasing average or below-average performers was ensuring that strong team members were not carrying weaker ones.

Other advantages cited included allowing underperforming staff to pursue fresh challenges more suited to their abilities plus increasing productivity.

But just four per cent of companies currently deliberately dismissed a proportion of their staff, the survey found.

Almost one in four bosses admitted that the current employment climate, where available talent is scarce, meant they would rather retain average or even below-average performers.

Three quarters of those polled also cited "introducing a culture of fear" as a deterrent to a dismissal quota.

John Rose, chief executive of Hudson UK, said: "Clearly, this is a massive Ė and, to date, relatively taboo Ė area of debate for British business.

"Shedding staff in a climate where companies are desperate for talent is counter-intuitive, with retention the focus for UK organisations," he added.

"But retaining for the sake of retaining will help solve neither the UK's skills crisis nor its increasing productivity gap. And we have found that it's not good for a company's long-term health or the career progression of the individual.

"Sometimes, the best career direction for an employee is out of the company. Businesses need to know how to assess the cultural fit, as well as the technical capability, of a recruit, as well as what training is required. Sometimes, the best career direction for an employee is out of the company," he said.

"Companies must take care, of course, that they do not inculcate a culture of fear, instead providing underperforming staff with time and opportunity to improve their performance," he concluded.

Older Comments

Yes - some hope. As anybody in Britain who has ever tried to remove a poorly-performing employee knows, doing so is a legal nightmare with all the cards stacked against the employer.

Jane London

I agree with the British managers. As an American manager, we too are faced with similar issue regarding underperformers. I believe however, that in order to prevent morale issues with associatea, cleanup is necessary. The loewr level employees are very aware of the 'poor performing' managers, and lose respect when they are allowed to continue to stay, regardless of their contribution to the bottom line.

MPenn Nevada

This article highligtsw classic top-down command and control thinking. This thinking creates a poorly motivated workforce who react out of fear for their jobs.

People join a workplace with enthusiasm and are forced out of that into apathy, a common mechanism to protect oneself from the anxiety caused by demeaning and disrespectful bosses.

In the process, bosses are unable to reap the benefits of employee creativity, innovation, productivity and motivation. The performance of these poorly motivated employees is one third or less than that if they were highly motivated.

Why do bosses cause such havoc? Because they simply don't know any other way.

Best regards, Ben Author 'Leading People to be Highly Motivated and Committed'

Ben Simonton Florida