The Impact of Underperforming Employees.

25% of SME owners say they would rather retain average or below average performers than fire them, given the current lack of skilled individuals in the market place.

So, a question posed at the Business Exposure Group meeting asked whether retaining poor staff for the sake of retaining the current makeup of the team was sensible.  Research has shown that one bad apple in a team can bring down productivity by 40%.  In simple terms, if you expect revenue generation of £100K from an individual in a group of four then the £400K revenue at only 60% productivity translates to a loss of revenue of £160K per year.  It’s an expensive way of burying your head in the sand!

The message of retaining an underperformer rings loud to your other employees, as well as your competitors.  ‘These people don’t know how to manage properly’ and ‘They can’t be doing well if you have still got him on-board’ were just two of the comments made at the meeting.  All agreed that firing an underperforming employee saves you money in the long run.  It takes away a strain on the team, removes the need for additional oversight, and in reality many of these workers contribute little.  In fact, one of our members commented that getting rid of an underperformer was like having additional perks for the other staff, who always rallied round and had a new spring in their step for the benefit of the business when the underperformer was removed.

Some other points raised were:-

  1. Dealing with an underperformer is not easy, especially when the employee took a chance on the business.
  2. A business can lose good employees by being slow to deal with the underperformer.
  3. Good workers are discovered, poor workers are found.
  4. A comprehensive job description is essential so that an employee knows exactly what is expected of them.
  5. Have we surrounded ourselves with a few underperformers because during the recession we lowered the recruitment bar, just to fill the vacancy, and now realise that we recruited from the best of a bad bunch.

A business can only show continued success by attracting and retaining top performers who have the competencies that we need now and in the future.  They will be agile and can multi-task.  They will have sound personal goals, low error and absentee rates.  They will provide high customer satisfaction, inspire and train others in your business and generally stay longer and produce a higher rate of return.

The impact of top performing employees is more than 3 times that of an underperformer, yet the difference in pay is often minimal.  Perhaps a look at the make-up of your team and the remuneration package for those in your business would be a timely and useful exercise.

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