The Theory of Performance outliers

The following process is a method to take out most (but not all) the “gut” feel
regarding where your reports are regarding performance. With this you can follow
when someone is over or under performing for a period of time.

Any outlier should be pulled back in line in less than 6 months or you run the danger
of losing an out performer or having to lay-off an under-performer.

There are two graphs that you need to review:

Time utilization of others

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report requires too
much of other

Below the
Line is
Positive –
the report
Seni

The things that take other user’s time are:

1. Training
2. Mentorship
3. Errors\Refactoring (developers)
4. Support of Work
5. Man management
6. Absenteeism

Time above the line

It might take a couple of months to notice a report has gone over the line. The
report should be spoken too at this point. If after four months the report should be
repeatedly informed of the long term consequences of this behavior. If the report is
over for 6 or more months the disciplinary procedures should begin.
Example:

In the above example a report is taking the CFA exams. He has more time to train,
which is OK but remains blow the line. However, as he studies he might not give up
other social activities and after a while this affects his work quality, he is sick more,
and others have to clean up his errors. He is spoken too and he makes more effort
to cut back in his personal life and in 4 months he falls back under the line.

The salary\knowledge ratio

The ratio of Salary, relative to the rest of the team & the market, to Knowledge is an
important tool to watch for under performers and those Senithat might leave for higher
pay.
Above the line is a
As an employee’s
Negative
relative
– thesalary increases you should see them move along the
line. report requires too

Time above the line

Report
It might take a couple of months to notice a report has gone over the line. The
report should be spoken too at this point. If after four months the report should be
repeatedly Junio
informed of the long term consequences of this behavior. If the report is
r Below
over for 6 or more months the disciplinary the Line
procedures is begin.
should
Positive – the
Actions to take can include to get the employee
report below the line:
uses less of

1. Training
2. Mentoring

Example: Change in Relative market

An employ can move above the line if the $ price of reports gets cheaper. In the
example above “report #1” Salary to knowledge ratio remained static but the
market for knowledge become cheaper. Now this employee is expensive relative to
his peers.

In this case the first thing to do is train the report to improve knowledge and move
him back below the line.

Also, here you might have an employee who does improve their knowledge and
move back below. Now the employee feels they deserve a pay rise. It is important
that you do not do this as you set them up to lose, as the move back instantly
moving them above the line.

To this end it is important to give an employee move responsibility and training and
see them move a ways above the line before giving them the pay rise.
Relationship between the two graphs

In the first example the CFA candidate was over utilizing others however as he
studied the CFA his Salary to Knowledge ratio improved. This worked to his
advantage.

Now in the second graph Report #1 received more training, mentorship and support
from his peers. So now his utilization of others increases. This is a very dangerous
situation for an employee as they above the line on both charts and they must work
hard to get under quickly.