Not Having That Performance Conversation Is Costing You Money

It is not an easy thing to do.  It is much easier not to do.  Having a difficult conversation about an employee’s performance can be a challenge.  When you push-off having that conversation because, “you don’t have the time”, or because “you are afraid it will demotivate and make performance worse,” the only person you are kidding is yourself.  There is a financial cost of leaders not dealing with employee performance issues.  Be real with yourself, it is dishonest not to be transparent about performance.

In every single situation that I know of where a manager held off having an important conversation with an employee, there were negative consequences.   It is your responsibility as a leader to be clear on expectations and to redirect behavior as needed.  The problem will not go away on its own.

In one of the past companies I worked for, there was one manager who supervised a team of 28 employees.  There was one particular employee who was a high performer in results but had a negative attitude.  He felt that because he got results, he was owed more latitude.  The manager knew a discussion was needed.  However, she put off having that conversation and kept putting it off.  His attitude became so bad that the rest of the team started becoming resentful.  By the time she did have that conversation, it went a loss worse than it could have gone if she would have just “bitten the bullet” and had it sooner.

The employee didn’t understand what he was doing so wrong.  In fact, he had nothing but positive reviews in the past because of his results.  His colleagues were so fed up by his attitude, that it greatly affected the team’s performance.  It took this manager twice, if not three times as much effort to resolve the situation than if she would have just done her job in the first place.  Any guesses on who this manager was?  Yes, it was me.  It was one of my first major mistakes as a manager, but it is a lesson that stuck with me.  After that, any time I hesitated having a discussion, I remembered that story and pushed through the “fear” and “discomfort”.

 

“Failure is instructive. The person who really thinks learns quite as much from his failures as from his successes.” – John Dewey

 

What are The Financial Costs of Not Having That Performance Conversation?  A research conducted by SHL gives us better insight.
  • An average of eight months is necessary to attain required on-the-job performance levels.
  • Nearly 23% of U.S. workers surveyed believe their colleagues are incompetent.
  • Nearly 1/8 of U.S. employees leaves his or her job before becoming competent.
  • S. managers waste an average of 34 days per year dealing with underperformance.
  • S. managers in larger organizations (> $8.5M in turnover) are spending 41 days, or 8 weeks per year managing poor performers.

 

How many of these costs could have been reduced by not procrastinating on dealing with the problem?

 

[tweetthis]“If you are not addressing poor performance than you are enabling the poor performance. “ – Elita Torres[/tweetthis]

 

This is the last of a four-part Performance Appraisal Series covering the following topics:

  1. Are Performance Reviews Still Worth It?
  2. Delivering an Effective Performance Review
  3. How to Prepare for Your Own Performance Review
  4. The Cost of Leaders Being Dishonest about Performance.

 

 

 

Elita Torres

I have over 20 years experience as a leader, first as a General Manager for several Big Box retailers with over 100 employees, then as a district manager overseeing an average of 23 stores. Currently, I am a Sales Director overseeing 4 Districts. My passion for leadership and personal development has led me to share my journey in a Blog. Find out more on http://www.leadgrowdevelop.com/about/