Now That’s Fair!

What’s fairer, to treat everyone the same, or to treat each individual as they should be treated?

I once worked for a company that insisted on paying everyone in the same role the same amount. Oh sure they had a scale for measuring longevity of service and skill, but they placed fairness over rewarding performance.

I remember reading once about the 20/70/10 rule. I think Jack Welch developed it. His basic principle being that the team with the best players wins.

Here is how the 20/70/10 rule goes…

20% of your staff will be the top performers. They will be the staff delivering most value to your business. Identify them, acknowledge them, reward them and do what you must to keep them engaged.

Then there is the middle 70%. These are the solid workers. They may not shine, but work hard and well and could shine with enough care and attention. Treat them as the heart and soul of the organization. Develop them, train them, coach them.

Then there is the bottom 10%. If not managed well the bottom 10% can take most of your time and effort. Effort that should be invested into the above two categories. Basically, they are the ones you need to move out so better talent can be brought in.

Remember however that the key to managing poor performance is to confront it. So dealing with the bottom 10% is not about yanking them out. It is about starting a conversation and taking the appropriate action as it becomes clear.

I really like how fair this system is. It recognizes great performance, addresses poor performance and helps the employer to tailor ‘rewards’ to what individuals value.

Now that’s fair!

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About One Strategies

Mike & Julie Edwards are directors of One Strategies, a specialist business consultancy service that works with companies to build tailored strategic solutions which deliver sustained growth and ultimately, higher returns. One Strategies is based in the Bay of Plenty New Zealand. 64 21 481 253 or 64 7 533 1971. Or email me; mike@onestrategies.com
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