Beware 'Toxic' Influence of Low-Performers

New research finds that organizations are falling short when it comes to rewarding and retaining high-performing employees—those who are self-motivated and hard-working. Worse, companies that don’t deal with “toxic” low-performers risk weakening their culture and driving away their best people.

These findings, drawn from a survey of more than 1,700 professionals from across the private, nonprofit and government sectors, are detailed in a research report by Arlington, Va.-based Eagle Hill Consulting, Are Low-Performers Destroying Your Culture and Driving Away Your Best Employees? The researchers found that:

• Low-performers hurt morale in the workplace and increase the workload for others. When asked to pick the greatest problems created by low-performers, the top concern was that they reduce overall workplace morale (cited by 68 percent of respondents). Forty-four percent said that low-performers increase the work burden on high-performers.
  
  
• Low-performers stifle innovation and contribute to a standard of mediocrity. Some 54 percent said that low-performers contribute to a lack of initiative and motivation, resulting in a work culture where mediocrity is accepted.

Less than half of respondents (45 percent) agreed that their organization does a good job of hiring and recruiting high-performers, the survey revealed. Similarly, less than half (49 percent) felt that their organization does a good job of retaining high-performers. Tellingly, only 60 percent of respondents said that they would rehire most or all of their current co-workers.

“These findings are troubling. The most successful organizations are those that drive out the weak links and nurture their top performers. Yet, our findings indicate that in some cases, low-performers are destroying an organization’s culture and causing attrition of the talented staff employers should retain,” said Melissa Jezior, Eagle Hill president and chief executive officer.

“It’s critically important to really understand just who your high-performers are, then design ways to keep them—added incentives and opportunities, for example,” she advised.

How to Move Forward

Given the negative impact that low-performers can have on the workplace, the report suggests four steps that a company can take to reward and retain its best people.

• Know your high-performers. Identify your high-performers (the top 10 percent to 15 percent of employees) and focus your efforts on retaining them. While all-employee surveys and exit surveys can help organizations maintain an active pulse on employee satisfaction and the reasons why people leave, it is important to narrow in on high-performer happiness and engagement. So routinely conduct “stay” interviews to solicit direct feedback from high-performers on how to improve the company.
  
  
• Define what “high performance” means in your organization—and publicize it. Identify the performance behaviors that your organization expects and rewards. A good place to start is by observing and recording the behaviors that your current high-performers exhibit, as “those are the best indicators of what’s important to and valued by your organization,” the report advised.
  
  
• Use a competency-based approach to hiring. Once you have defined the high-performer knowledge, skills and abilities that you expect from employees in each role or level, screen candidates for these qualities throughout the recruitment cycle. Also, given that poor management can drive high-performers to leave, evaluate candidates against defined management competencies and hire the right supervisors. “Dig deep into a candidate’s career and educational history to understand the individual’s motivations and key influencers to determine whether they align to your workplace culture,” the report recommended.
  
  
• Implement a “quality of hire” survey. Three months after a new hire is onboarded, the hiring manager (or immediate supervisor) can complete a survey and rate the new hire on his or her performance. Companies may send automated “quality of hire” surveys after three, six, nine and/or 12 months. Based on the data results, companies may need to adjust their hiring processes accordingly.

“The cost of attrition is high, especially when it’s your high-performers who are leaving,” said Jezior. “Companies that do not address low-performance issues will likely weaken their culture and drive away their best people.”

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.