At some point, all of us are in a meeting where a discussion breaks out over whether a particular business initiative should be implemented. Someone will say, “I heard about it on a podcast/TedTalk,” or “A friend of mine at XYZ company did it and it worked for them,” or something similar. The question then is how do we really know that it will work under a given set of circumstances? While we never have 100% of the information we would like to have before making such a decision, we do have tools to help guide us.
Dennis Adsit and I entered such a discussion about intentionally letting go the bottom 10% of a company’s workforce annually a while back. This was one of Jack Welch’s tactics and it became known as “Rank and Yank” (R&Y). The idea behind it was that the amount of resources spent on better performers has a higher return on investment than putting them towards the lowest performers. After a bit of back and forth, we decided to test this the best way we could. The result was an article in Consulting Psychology Journal: Research and Practice.
There are two main takeaways from the article:
1) Under certain circumstances, R&Y may be a very viable option for improving organizational effectiveness. Dennis summarizes this well in this post.
2) When management comes to your team with “I’ve got a great idea…” you must be prepared to develop an analysis to respond to the request. It is this that I want to address a bit more.
People sometimes confuse having all of the information and having an evidenced-based recommendation. In our paper we simulate an outcome based upon a set of assumptions. We talked quite a bit about those assumptions before we accepted them. There were also cases where we thought different assumptions were important, so we ran the numbers under different conditions. This allowed us to draw better conclusions from the data.
In the article we chose to model call center agents for several reasons. Among them were that we knew from experience with clients that their job performance (after training) is consistent on a week-to-week and can be measured objectively. This helped in estimating the impact of turnover. But, we also found that others had measured the “softer” costs of turnover on agent performance. This served as an excellent reminder that with enough diligence and care there are many aspects to productivity that can be measured, but that are not. HR brings a lot of value to table when it rolls up its sleeves and digs into these issues.
It did not really matter than we chose to simulate the effectiveness of R&Y. It could have been a selection system, a management development program, or a training class. What is important is taking the time and effort to listen to others and work through the data. That allows HR to have significant value and impact.