The High Cost of the Mediocre Employee Employment, Productivity and Value

Suffer long for mediocre but loyal Huns. Suffer not for competent but disloyal Huns.

-- Attila the Hun

Most organizations take one of three stances on employees:

1. Employees are our most valuable resource.
2. Employees are a cost center to be marginalized.
3. Employees are our most valuable resource and a cost center to be marginalized.

This is, of course, a false trichotomy. You can't at once value and devalue a resource. Keynesian economics aside, there is no market in the world that supports this kind of thinking.

You must either value a thing or not. It's like going to a posh restaurant and asking for the kiddie menu.

The Value Equation

Employers and employees have implicitly accepted a value proposition. The employer trades money in exchange for the employee's time. The assumption is that the employee will do something productive with that time, or else the relationship will be terminated.

The tricky part is establishing what "something productive" actually is, although we do know that different types of something are worth more than others. This is why a programmer is paid more than a support position, or why a Rails developer gets paid more than a PHP programmer (according to Rasmussen)¹.

For What Are You Paying?

The trouble is, you don't know if you are paying for ...

• something productive,
• something more productive, or
• something less productive

It seems to me that one shouldn't pay too much or too little, but that paying for what want and need is the most appropriate strategy.

Maybe less productive is the best course in some cases. But why would you pay for more when you'll actually get less.

Yet ...

People Considered More Than Numbers

I am always troubled when I find an organization that struggles to meet its goals and objectives, yet neglects the very means used to accomplish such things -- the people, right?

Yet time and again, I encounter HR departments that focus only on the forms, numbers, and regulations. These things need attending to be sure, but it's only one part of talent management.

For some HR departments, it's all they can do to keep up with compliance. That's a shame. HR, like IT, could be a trusted advisor in the organization.

On the other hand, some HR departments embrace stance number three with such vigor that it rubs off on other departments.

When we distance ourselves from the individual, it becomes frightfully easy to reduce the situation to equations. History provides ample demonstration of this in war crimes.

People are more than the numbers.

Impact

The impact of mediocre employees should never be underestimated. I spent a number of years living in a highly socialist country in South America. One thing I noticed is that pretty much everyone (with a few rare exceptions) had lost the will to achieve.

A mediocre employee will drag others down or force good employees out in frustration.

Poor Performance

Imagine you become ill and require surgery. Will you seek out a so-so surgeon? The surgeon-in-training that gets the least pay and the most hours? Or do you want a surgeon with skill and experience?

Let's hope that the hospital is not an organization that pays lip service to the value of good employees.

Yet this is what organizations everywhere do every day. They save money by keeping employment costs down and lose money in lost productivity or worse.

Held Hostage

Joey comes in late every day, smokes where ever he pleases, and dresses like a circa 1970s pimp. Finally, you've had enough and you tell his manager, Paul, to fire him. But Paul goes pale and says with quivering lip that only Joey knows the ERP server.

Ed works with Joey. Ed's a good employee. Shows up on time, works conscientiously. We like Ed. One day, he gets fed up with Joey's behavior and without saying a word to anyone, applies for a job -- and gets it. Two kees later, he's gone, and now Joey is for certain the only one that "knows" the ERP server.

Failing to deal with problems of pay and promotion will leave you hostage to the worst employees.

Really Bad Problems

Occasionally, the sister circumstance and brother mediocrity will meet at a critical moment to produce a Really Bad Problem. What is that, you say? Well, an RBP is like any other problem, except it comes with issues of politics, PR, or even liability.

I know of one such RPB -- I am not at liberty to discuss the details -- that, if handled incorrectly, would have resulted in headline news in the morning papers.

Yet allowing, nay encouraging, mediocrity in your work force is a good path to an RPB.

Solutions

So these are some of the issues that result cost, embarrassment, legal summons. What some solutions.

Professional Ladder

A professional ladder is a tool that measures the capability and contribution of a person. It is objective and detailed, covering things like skill, responsibility, and experience.

If you can link the levels of a ladder to levels of pay, you have solved a big part of the value equation while making it clear to employees as to how and when they may improve themselves.

Market-Based Pay

Market-based pay means you compensate your staff at, near, or even slightly above the jobs available in your region. This has a few notable implications:

• Your staff are unlikely to find a better paying job in the area.
• You may be more competitive when recruiting qualified staff.
• You are no longer held hostage by bad employees because you can recruit qualified staff.

That first point is worth some additional consideration. Consider Jack. He's nimble, quick, and has a horrible attitude. He's always bad-mouthing someone and complains to anyone that will listen.

You implement market-based pay for your division, including Jack. Now Jack has a serious problem. He hates the place he works for, but loves the pay. He can't look elsewhere because he reckons there isn't any other place where he can get paid so well.

Lesson: Fix your personnel issues before you implement market-based pay.

Paying at market is a strategic move for the organization. It will cost you more, but you'll have less turn over and better overall performance.

Remediation

Over the years, I've been presented with a lot of different reasons why higher education is so poor at firing people. Let me affirm that I believe in meeting people where they're at. I am not about to fire a loyal hun if I can find a means of retaining that person in a capacity that does suit their capabilities.

But disloyalty and attitude problems are personnel issues and should be dealt with accordingly. Plain and simple.

Conclusion

Pay your employees appropriately. I know it feels like you are burning through money, but the simple fact is, you are going to do that one way or the other. Either through qualified employees that get more done, or unqualified employees that take more time to get things done.