Most People Are Underperformers

May 15, 2012, 11:03 am Kochie's Business Builders Yahoo!7

How can we harness the potential of our workforce?

Most People Are Underperformers

Most people are under-performers.

That’s the finding of a new study that debunks the long-held belief that individual performance fits a normal distribution, or bell curve.

It has long been thought by human resource managers that the majority of people are average performers with about 50% above average and 50% below. On a graph the distribution looks like a bell.

However a new study, The Best and the Rest: Revisiting the Norm of Normality of Individual Performance, has found that individual performance follows a much more skewed distribution where the vast majority of people are actually under-performers.

Statisticians call it a power law distribution.

In conducting their research, Ernest O'Boyle Jr. and Herman Aguinis conducted five studies involving 198 samples that included 633,263 researchers, entertainers, politicians, and athletes. Of the total sample, 186, or 98% followed a power law distribution more closely than a normal distribution.

The results were consistent across industries, types of jobs, types of performance measures and time frames. So, basically, the findings are pretty hard to argue against.

O'Boyle Jr. and Aguinis say managers need to acknowledge the distribution so that they can recognise and foster the out-performers that are carrying their organisations.

So now that you’re aware of it, how can you identify those over-achievers in your business? What structures are there to cultivate and capitalise on an innovative, achievement-oriented team?

One original approach that’s harnessing the power of top performers is the non-hierarchical workplace. Apparently pioneered by US gaming company Valve, they claim to have been boss-free since 1996 and as a result have some of the highest performing employees around.

According to their employee manual, profitability per employee is “higher than that of Google or Amazon or Microsoft”. The hierarchy-less environment gives employees full autonomy to decide which projects to work on and allows team structure to happen organically.

In doing so, employees are taught to spot valuable projects and work where they believe they can be of the most value. Everyone’s collectively responsible for the success or failure of projects, there’s no room for the unproductive to hide, no buck passing and the natural leaders lead where they’re best equipped to.

In this environment people are rewarded for finding a position in the workplace where they can make the biggest difference. To everyone’s benefit, each employee puts themselves where they can perform the best. Genius.

Most critical to this working in practice is that the compensation of each employee is decided by peer review.

While this system developed organically at Valve and would be a difficult thing to replicate elsewhere, what it demonstrates is that by putting the right incentives and autonomy in place the best employees will rise to the opportunities in front of them. Underperforming workers will inevitably lag behind.

From there a leaner, more efficient team can be refined with real over-performers recognised and rewarded for their above average contribution.

And since O'Boyle Jr. and Aguinis have now found that the majority of employees aren’t performing to their potential, it’s high time your business puts in place a reward and review structure that separates the wheat from the chaff.