It’s surprising how accurate a description of your workforce can be given through an analogy with horses, by separating them into these 4 categories.
Racehorses – This describes your top performers, those employees who are driving your business and delivering success, whether this be profit, growth or a combination of both.
Workhorses – These are your ‘engine room’; dependable, reliable and the backbone of your workforce and typically form the majority of your employees.
Lame horses – Struggling or not performing at their best, these individuals may come good with some development or nurturing.
Dead horses – The dead wood of your organisation, hanging around because they are being paid and generally performing badly.
The success, or otherwise, of any organisation can be measured by the percentage of each category found within its workforce, and a typical percentage split would be 20/70/5/5, but inevitably the output and quality of your workforce can vary enormously.
“Undervalued employees can have catastrophic consequences on your business performance”
By having a strategy in place to retain your best performers, improve overall standards and manage the worst performers out of your business. But, often this falls into the ‘too hard to manage’ box and the status quo is maintained. By taking a one cap fits all approach businesses lose their Racehorses and gradually turn their workhorses into lame or dead horses, as those individuals feel undervalued by their employer with catastrophic consequences on your business performance.
How can you avoid having too many lame horses?
Performance management enables the employer to measure the effectiveness of the employee, set expectations for their future output and ascertain their true value to the business. Effective performance management is a two-way process and is best managed through regular dialogue with employees.
A good reward strategy enables the employer to tailor their remuneration package around their employees. This will factor in the value of the individual to the business, their value in the external job market and the importance of their role to the Company. The key output will be to generate internal equity and external competitiveness. Annual pay reviews, incentive schemes and other benefits will all form part of the strategy.
The answer is to grasp the nettle and truly reward performance using the following tactics.
Pay Reviews – If you are in a position to award pay increases, create a budget and differentiate between your best performers and your worst performers. Be bold and show your stars how much you value them and make sure the poor performers understand how they are rated.
Bonus and Commission Schemes – Incentives should be earned and the poor performers should not profit from the efforts of their colleagues. A key performance metric in any incentive payment should be individual performance to enable rewards to go to the best performers.
Benefits – Tailor your benefits package around your top performers. Find out what turns them on and build your benefits package to keep them interested and motivated.
A final thought….
The old adage is that you should know your people. Communication is the key, so ask questions and listen to the responses to find out what makes your star performers tick and what makes them better than their colleagues. Performance reviews should be a 2 way thing. What we are saying is that ‘communication is king’, tune in and ramp up your performance.
People represent a significant cost for most businesses and appropriate use of reward systems will lead to an improved return on your investment and greater sustainability. A fully engaged and motivated workforce is a significant asset to your business.
Get in touch using the contact form on the right to find out more.