In the past year, The Denniston Consulting Group assisted three clients in moving their organizations from entitlement based to one that is focused on accountability. All three organizations had to address two issues; major overstaffing and poor productivity.

One of the common threads throughout these organizations was their performance evaluation process.

• Managers had not been setting clear objectives for employees to be measure against
• Management rated an overwhelming majority of the employees as outstanding or excellent

In one organization, less than 1% of the employees were rated below average. This would be great if it were accurate. When meeting with the leader of this organization, it was determined that they were overstaffed, with nearly 200-250 more employees than needed. However, when it was time to make initial cuts in staffing, it was discovered that this company did not have enough competent employees to staff the organization. In order to keep the business functioning, they had to retain 75 employees that still did not meet their requirements.

The direct result of not dealing with poor performers over the years:

• The cost of the 200-250 extra employees was $8-10 million per year
• The impact of non-performers resulted in millions lost productivity and thousands lost in poor morale, resulting in lost work time. It has taken this company nearly a year to bring on the right people to achieve their corporate goals.

Managers owe it to the good employees to address the issues with poor performers by either correcting their performance or terminating employment. Although many companies do not enforce this behavior, it is critical to operating a productive, profitable and enjoyable workplace.

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