This is a guest post from my good friend Dick Wells, author, speaker, and CEO of the Hard Lessons Company.  This first appeared in his blog on July 10, 2013.  Enjoy…. Richard

 

The headline in the July 4th Tennessean was: “Vanderbilt University Medical

Dick Wells CEO, Hard Lessons Company
Dick Wells
CEO, Hard Lessons Company

Center Cuts Jobs.” The number of employees affected was unspecified, but later reports hinted it was about 300±. A VUMC spokesman clarified that the cuts were “not layoffs,” but were “focused on employees who scored below a certain threshold in performance evaluations.”

Of course, VUMC is being trashed by some for being heartless and interested only in money. Hmmm…I wonder about that since they provide over $200M (yes, $200M!) of free healthcare per year to uninsured and poor patients.

To put this in perspective, 300 people are only 2% of VUMC’s workforce of 16,000. I guarantee you that more than 2% are under-performing. In most large organizations (including ones I have led), upwards of 5-10% of employees aren’t really performing at the level needed and that they are paid for. So I say, “Bravo, Vanderbilt!” But I do have a few thoughts (learned the hard way) that might help VUMC—or your organization—keep out of the headlines when taking on the next 2%.

#1 Rather than doing all performance appraisals at the same time, spread them throughout the year. Every PA is important and deserves thoughtful, special attention, which is difficult when they are all due next week.

#2 Under-performers should be released when remedies have failed. (VUMC could have avoided the headlines by taking action one at a time instead of en masse.)

#3 Nothing said or written in a PA should ever be a surprise. The purpose of a PA is not to ambush an employee. Performance feedback—especially when negative—should be given when it occurs.

#4 Don’t use numerical ratings. Numbered systems put the employee’s focus solely on the rating instead of the actual performance. Whatever needs to be said, can be said without assigning a number to it.

#5 Minimize the use of adjectives to describe performance. Whether good or bad, try to express performance in terms of outcomes/results/etc.

#6 If overall performance is unsatisfactory, don’t expect the employee to agree with you. There are few people who will acknowledge they aren’t getting the job done. If they do agree, they will believe it is someone else’s fault. Don’t expect to hear “You’re right, I should be fired.”

#7 Working hard is not the same thing as getting results. Most people believe they should be rewarded for working hard and doing their best even if the results are unsatisfactory. After all, isn’t that what we teach our children? And by the way, almost all employees believe they are working hard. Don’t expect to hear “I’m lazy and deserve to be fired.”

#8 Underperforming employees will rarely fix themselves. It is your job as the leader to help them raise their performance. [I’ll discuss some of the reasons for underperformance in my next post.] However, if their performance can’t be raised, you need to do what VUMC did.

In Straight From The Gut, Jack Welch says, “Removing people will always be the hardest decision a leader faces. Anyone who enjoys doing it shouldn’t be on the payroll, and neither should anyone who can’t do it.”

Most leaders have a tendency to postpone the “hardest decisions” that affect people; I have certainly been guilty. In the long run, it never pays to tolerate under-performance in your organization. When you do, it can become the “norm.” Is that what you want?


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