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What sort of boss gives a monkey's about his staff?

Sun, 28th Jan 2007

IT'S ALL very well going green, but some companies seem keener about that than they are about their employees. A survey by management consultancy Hudson found that three-quarters of senior executives would do an annual cull of their workforce to boost productivity and performance. One in six think they could get rid of 20 per cent of employees without damaging performance or morale nearly half reckon firing up to 5 per cent a year would be a good thing.

Even though only 4 per cent actually carry out this threat, it is still a revealing, even breathtaking, finding. This is what executives really think of their 'most valued asset': fodder to be disposed of against a mechanical target. Not only that, it utterly ignores their own contribution to their employees' underperformance, raising so many questions it's hard to know where to begin.

But let's try. In another survey, the Chartered Institute of Personnel and Development noted that if Britain at work was a marriage, it was 'a marriage under stress, characterised by poor communications and low levels of trust'. Only 38 per cent of employees feel senior managers and directors treat them with respect, and 66 per cent don't trust them. Around a quarter of employees rarely or never look forward to going to work, and almost half are leaving or trying to. 'The findings suggest many managers aren't doing enough to keep their staff interested,' said the CIPD's Mike Emmott. The result: underperformance, low productivity and high staff turnover.

The last UK survey for Gallup's Employee Engagement Index makes similarly grim reading. In 2005 just 16 per cent of UK employees were 'positively engaged' - loyal and committed to the organisation. The rest were unengaged or actively disengaged - physically present but psychologically absent. And it is getting worse: since 2001 the proportion of engaged employees has fallen, while those actively disengaged have increased to 24 per cent.

Gallup puts the cost to the economy of active disengagement at pounds 40bn, as employees express their disenchantment by going sick, not trying, leaving, or threatening strikes. The culprit, says Gallup, is poor management. 'Workers say they don't know what is expected of them, managers don't care about them as people, their jobs aren't a good fit for their talents and their views count for little'. Disaffection grows with tenure, so 'human assets that should increase in value with training and development instead depreciate as companies fail to maximise this investment'.

In a perverted way, then, employers are right when they says there's something the matter with their workforce. It's just that they are in total bad faith about where the blame lies. In any case, bottom-slicing the 'worst' employees is likely to make things worse, not better. Yes, forced ranking is a way of life at GE, and Microsoft does it too, but there is no evidence that it has a causal link with their success and in most cases it usually does more harm than good.

Forced ranking rests on the idea that the performance of the whole is the sum of those of the individual parts. But the sports pages confirm that teams with the most talented individuals doesn't always win - see Chelsea and Real Madrid. At least as important is the context. Here again football supplies the evidence. Alongside many successes, the Pre miership has plenty of disconsolate foreign players - bought because of their undoubted star quality abroad but who fail to deliver in the English setting.

Of course, individual ability makes a difference: Man U will beat Hartlepool 99 times out of 100. Sometimes companies do have to get rid of people, particularly if they recruit them incompetently. But forced ranking introduces fear and competition, and while in (economic) theory these optimise individual performance, in (management) practice they pessimise collective performance.

Consider research on nursing in the US, which shows that units with the most 'talented' nurses and a 'heads-will-roll' attitude to mistakes never learn, because clever nurses find ways of compensating for flaws and quietly correct mistakes to avoid reporting them. But units that report many more mistakes are actually safer. They emphasise teamwork and encourage nurses to report errors. Because learning is shared, individuals and the collective both get better.

This is the authentic magic of management: getting outstanding performance from 'ordinary' resources by multiplying individual and organisational talent. Fighting over who gets most of a fixed amount of it and jettisoning the rest, on the other hand, is a mockery.

The Observer, 28 January 2007


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