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Resources
 
Making Every Hire Count: Maximizing Your Human Capital Investment
Quality of Hire Begins With Sourcing: Pick Your Method to Suit Your Needs
Getting a grip on mission-critical "soft" skills: 5 simple steps
Forget Doing "More with Less" Older Workers Help Companies Accomplish "More with More"
For Expanding Your Value-Added Services Profitably, Hiring Is Rocket Science
Assessing job candidates beyond the technical skills
Employer Branding: The solution to attracting & keeping great staff
Successioning Your Business: Five Simple Steps that Aren't Exactly Easy
The 20-60-20 Rule: Simple Concept, Practical Applications, Profitable Results
Universal Employment Concerns: Creating Opportunity Out of Adversity
Hanging Flexible in Tough Times
Value-Driven Outsourcing
Downsizing: Don't Retreat - Motivate!
Navigating Today's Hiring Minefield: Who Is Available & Do You Really Want Them?
Today's Financial Storm Inspires Tomorrow's Long-Term Success
The case for HR: Why & how you should implement formal policies & procedures
Staffing for success in a soft market
The Challenge of Hiring Sales People
Workforce Optimization
Evolving Your Company into a Service-Oriented Business
Redefining Sales
Staffing for the Future of Print
Communicating With Employees From Start To Finish
Eight Steps to Prepare You for the Retirement Brain Drain
Job Hopping for the Right Reasons
Resumés are just the Tip of the Iceberg
How Some Hires Fail
Hire Like You Mean It
Concluding Your Hiring Workflow: Closing the Deal
A Hiring "To Do" List
Challenging Employee Excellence to Achieve Company Pre-eminence
Challenging Employee Excellence to Achieve Company Pre-eminence
Aim for the Top: Getting Value for Compensation Dollars
The Productivity Challenge
The Dynamics of Telephone Interviews
How People Enable "Enablers"
The People Side of Succession Planning
Tips for Effective Interviewing
Corporate Culture: What It Is, Who It's for, Why It Matters
What's In a Name?
Investment in Regulatory Managers is Money Well Returned
Flexibility in HR Management Reaps Rewards
People Drive Technology
Return on Experience
The Credible Resume
Leadership Delivers
Managing Employee Skills & Knowledge
Managing Employee Success
Profit by being a good employer
Achieve Employee Excellence with Effective Job Descriptions
Maximize your Human Capital Investment
Demystifying Job Descriptions
Benefits of Outsourcing
Surviving The Management Paradigm Shift
Invest in the Best


Insights

The 20-60-20 Rule:
Simple Concept, Practical Applications, Profitable Results


Throughout the current economic downturn, our articles have demonstrated the necessity of keeping a watchful eye on your staff count and the advantages of continually adjusting your human capital to meet the changing needs of your business. We also recognize, however, that continuous strategic deployment of staff isn’t such an easy project when you’ve also got a printing business to run. Therefore, this article sets out a theory called "The 20-60-20 Rule" — a simple, practical system of categorizing staff that we believe can streamline your ongoing assessment of your company’s human-resources requirements beautifully.

Champions of the 20-60-20 Rule include small-business expert Ray Silverstein and the self-styled “Pitbull of Personal Development”, Larry Winget. PrintLink believes both their analyses and recommendations for applying the Rule are not only astute but are also well suited to the printing industry. We further believe that applying the Rule effectively can help printing companies work through their current economic challenges to achieve many positive outcomes. For example, as the following article explains, the Rule can help you streamline such important tasks as delegation and strategic succession planning.

Explanation of the Rule

A review of the performance of practically any group of employees will divide the group into three categories:

  • The Top 20% comprised of strong performers
  • The Middle 60% comprised of average performers
  • The Bottom 20% comprised of weak performers
Your top 20% are just that – your top performers. They reside in every corner of your business and are the cream in each area of your workflow. They:
  • do their jobs well, understand what results are required of them & have the skills to deliver them
  • have integrity, are honest
  • respect coworkers & customers
  • work whether you are around or not
Handling instructions for your top 20%: As far as maintenance is concerned, since they are already doing fine, show trust by delegating responsibility to them appropriately. Let them take care of things themselves without constant micro-managing. Just check in with them periodically to find out what they need to do their jobs effectively and then provide it. Be sure to acknowledge them with appropriate distinctions and find ways to reward the strength of their contributions to your business. Otherwise stay out of their way; don’t waste time fixing what isn’t broken.

As far as retention is concerned, find ways to promote and challenge them as they desire, or else be prepared for the likelihood that these high achievers will leave you for bigger and better opportunities.

Your bottom 20% - the weak performers:
  • aren’t productive
  • come in late & waste time or perhaps don’t come in at all
  • need constant supervision
Handling instructions for your bottom 20%: As your weakest and potentially most dangerous, error-prone group, these are the staff you need to manage most vigorously. Diagnose their problems, offer them remedial training and opportunities to improve, but if all else fails, ditch them and hire new staff instead. (For further discussion, see below.)

Your middle 60% - the average performers:
  • are pretty good at their jobs
  • do most of what they are supposed to do
  • are nice people who are basically good employees
Handling instructions for your middle 60%: Business leaders should spend most of their time on this group, not only because it is largest in number, but also because it includes both promising talent in need of a chance to shine as well as bottom-feeders just waiting for their chance to slack off. Inevitably, once vacancies appear in either of your top- or bottom-20% groups, certain individuals from your middle 60% will migrate to one or the other extremes. The manager’s job is, firstly, to anticipate in which of these two directions the people in your middle-60% group are headed; then, secondly, to mentor and develop the best ones into members of the top 20%, thus filling your company’s succession needs.

Helping the Cream Rise to the Top

Recently PrintLink witnessed a wonderfully encouraging example of these dynamics: a hiring manager of a facilities-management company came to us seeking someone for a key management role at one of their important branch sites. As with most companies who rely on our services, the client asked us to locate candidates who already held a number of years’ experience performing exactly the same function they required their new hire to do.

But during our search, we identified a job candidate who had the appropriate background and some of the required experience—but not the identical direct facility-management exposure required for the job we were asked to fill. In subsequent conversations with this promising candidate, however, we recognized that she had the foundation, as well as the critical desire and interest, to move from the middle 60% to the top 20%. In fact, she confided to us that this type of promotion was the precise career goal for which she was planning. So we introduced her to our client for consideration anyway—and ultimately the company not only hired her, but after only a few short months, they formally recognized her for achieving success in their operations. The greatest thing about the middle 60% is that the cream does indeed rise to the top, and the above example is just one such illustration.

This story also demonstrates why, even though many companies must currently undertake various degrees of downsizing in response to soft market conditions, we caution business managers against letting their middle-60% group go wholesale. Although flattening an organization may seem like a viable quick fix for cutting costs, making the mistake of eliminating your middle 60% rather that the bottom 20% may also eliminate your company’s future.

Letting the bottom 20% go

We further recognize that the prospect of evaluating, disciplining, and firing staff makes some managers squeamish. But regardless you must eliminate the individuals in your bottom 20%. Face facts: these non-contributors will never be more efficient nor embrace the expeditious technology of the future. At best, the bottom 20% are below average—and as PrintLink, Ray Silverstein and Larry Winget all agree – even average doesn’t cut it anymore--not in today’s challenging economy and definitely not in the quickly evolving world of print. If in the current challenging economy, your company needs to downsize anyway, so much the better: your bottom 20% gives you an obvious place to start that won’t hurt your operation in the slightest.

Even in the best of times, management of strong organizations typically eliminates the lowest producers. One major U.S. corporation, for instance, gained notoriety for insisting that every department manager rank his or her personnel annually and eliminate the bottom 10% of workers. A likeminded president of a dynamic Canadian company built his organization by terminating the lowest-volume sales representative every quarter. While these practices may seem radical, the theory behind them is entirely sound: define and rank performance expectations, then take action based on the results.

However, always perform due diligence before axing someone. You don’t want to brand an employee unfairly or falsely when in fact appropriate mentoring or training could move them into the middle-60% group or even the top-producing 20%. So first follow standardized personnel-management practices geared to identifying and correcting poorly performing employees. (Some of our previous articles for WTT outline several such measures.)

Start by creating job descriptions and performance standards for every one of your staff. Job descriptions are incredibly useful tools. They tell employees what’s expected of them and give you a standard for measuring each employee’s performance.

If your measurement indicates that someone isn’t performing well, invest the further time and thought required to figure out why. Is lack of training the problem? If so, make training available. Is the poor performer a good worker, but poorly suited to his job? Then see if a more appropriate role can be found for him elsewhere in the company. Especially for higher-level or complex job functions, personal profile testing can be a useful tool to assist with this type of assessment.

But in the end, if you determine that, no matter what you do, you will not be able to assist the poor performer to become a genuine contributor, then it is time to take decisive action and fire him or her, following an appropriate protocol for the prevailing employment laws in your area.

Finally, don’t deny your responsibility for constructive firing by keeping poor performers around in case you won’t be able to compensate for the pending mass retirement of Baby Boomers. Indeed, until recently, many employers were concerned that there wouldn’t be enough people to replace them. But lately a combination of countervailing factors has offset the projected shortage of workers, including the high levels of productivity enabled by technology and leaner management practices to generate more profit-building efficiencies. Declining business volumes have also (at least for now) necessitated a decline in staff head counts.

Similarly, we’ve noticed that the staff of most printing companies consists largely of people near or past retirement age or else young people who are relatively new to the workforce. The “middle-aged” group is noticeably missing from our workplace. PrintLink’s explanation is that, during the last economic turndown, people who found themselves out of work set up their own temporary enterprises; and when the economy recovered, many of these people elected to stay with their own businesses and didn’t return to the employable workforce. Formerly these circumstances raised concerns over succession planning. Now, however, the rocky economy and weakened business cycle have led to a decline in the number of people needed to replace those who will soon retire; so likely the numbers will tend to take care of themselves.

The above circumstances leave managers with even less justification than formerly for retaining the bottom 20% of their staff.

Targeting Profitable, Sustainable Results

PrintLink views our industry’s current evolution to be among the most pivotal in its history and firmly believes that strategic personnel management will be one of the keys for companies to make a successful transition into a new era of sustainable profitability. The fact that for over 16 years our company has been North America’s leading source of human capital for all positions in the printing industry gives us the insight to recommend the 20-60-20 rule to the industry we serve. In particular, we suggest that managers take advantage of the Rule’s practical benefits for continually assessing their human resources, delegating effectively, and implementing strategic succession planning.



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