Chapter 40The Staggering Cost of Poor Performance

The Challenge

In nearly every workshop, I ask the following question: “How many of you would agree that most organizations tend to keep poor performers too long?” Every time, hordes of hands shoot up, demonstrating yet again that the largest gap in business or in life is the gap between knowing and doing. Most often we're not held back because we lack knowledge but because we don't do what we know we should.

Count the Costs…If You Dare

Although it's difficult to precisely quantify the cost of just a single poor performer (some researchers have attempted to), I feel safe in asserting that if managers more carefully considered the resulting damage, they would be inclined to more quickly prioritize either getting the person better or getting a better person. You may recognize some of these themes from our chapter regarding the people pillar of culture. Do you know why they are here? Because most likely, the people who came to your mind when you read that chapter are still here as well. Here's a quick sampling of what your failure to do your job is costing you and your organization:

  • Lost production. This factor may be the easiest to quantify, because it is found by comparing the production difference between a top and bottom performer. The fact that this cost is incurred month in and month out causes the penalty for delayed action in turning around or removing poor performers to escalate in a hurry.
  • Broken or lost momentum.

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