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Employee Productivity (the 80/20 Rule)

Employee Productivity (the 80/20 Rule)

The Italian engineer and economist Vilfredo Pareto lent his name to the Pareto principle or what is more commonly called “the 80:20 rule” today. Pareto rather practically suggested that 80% of the land in Italy in the late 19th century was owned by 20% of the population and, at a slightly more mundane level, that 20% of the pea pods in his garden contained 80% of the peas. He extrapolated from these observations to state that this 80:20 rule could be more widely applied and could be a general heuristic or rule of thumb for business. For example, 80% of an organization’s sales are likely to come from 20% of its clients. This was not intended to be an exact representation of the facts but merely acted to draw attention to the smaller percentage in order to better manage operations for instance.

Many other examples of the 80:20 rule have been evolved over the last 100+ years since Pareto suggested it but one of the most interesting is when it is applied to employee productivity. Hence we might say “80% of the productive effort of an organization comes from 20% of its employees“. This statement usually leads to the development of incentives for the 20% (to make sure that they are well-rewarded and stick around and to encourage them carry on contributing at this high level. However, much less time is spent on the real issue that arises even if this statement is only broadly true, which is what to do with the 80% that are only contributing 20% of the productive effort.

Addressing productive underperformance and mediocrity

Although a certain proportion on an employee population will inevitably not pull their full weight, to live with an underperforming population or what is sometimes called a “mediocre” group of employees, at anything like 80% of the total employees would be of major concern to any business. It is therefore extremely important to specifically address this population and to carefully assess why its contribution is less than it should be and in what particular ways. So what is employee mediocrity and what are the reasons for it?

Mediocrity in general can be said to describe the state of being “average” (or even slightly below average) or “not outstanding” and usually also includes a person demonstrating indifference or being uninterested in the quality of outcomes. When applied to individual employees, this clearly then applies to some or all of the work tasks performed and it is this broad level of underperformance and disinterest that creates the concern for a team leader. In other words, these employees are doing the bare minimum expected of them.

So what are the consequences of having one or more mediocre people on a team and what can be done about it? Let’s look at the five main problems typically created and what might be done to counter the impact:

Problem/Issue arising from Medicore Employees Potential Solutions or Actions for Leaders to Consider
1 They are often “high maintenance”, and therefore can take up considerable management time and attention. Avoid getting drawn into more discussion or debate than would occur with your more able employees. Police this carefully.
2 They are likely to have lower standards and make more errors or mistakes. Establish clear standards for service and quality and ensure that acceptable levels of performance without error or mistakes are clear.
3 Team morale and productivity potentially suffers (and sometimes considerably). Listen carefully to peer feedback from team members on their colleagues, investigate and act quickly to address issues when they arise.
4 They are likely to be less creative and passionate and may also be more change resistant. Expect creative input from mediocre employees at the same level as others and clearly point out shortfalls when they occur.
5 They may block more able employees in terms of career progression Actively “performance manage” any mediocre employee who may well be blocking another more able individual or his or her career advancement potential.

Of course, the best way to lessen the impact of employee mediocrity is to avoid hiring such employees in the first place (which means that every leader needs a rigorous process to identify who is likely to have been a mediocre contributor in the past be or to be more likely contribute in mediocre fashion in the future). And in the event that such people do get hired (or a leader inherits such employees on his or her team) then close appraisal of performance (which may ultimately lead to termination) is another valuable approach (albeit potentially complex and time-consuming, not to mention legally convoluted at times). However, investing in this increased effort to guard against mediocre performance is likely to pay very good long-term dividends. Even if this only leads to a move from an 80:20 ratio to a 75:25 ratio, the impact is often enormous for the team, a department or even a whole organization.

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About Dr. Jon Warner

Dr. Jon Warner is a prolific author, management consultant and executive coach with over 25 years experience. He has an MBA and a PhD in Organizational Psychology. Jon can be reached at OptimalJon@gmail.com

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About the Editor and Primary Author

Jon Warner

Jon Warner is an executive coach and management consultant and in the past has been a CEO in three very different companies. Read more

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