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The People Performance Gap

There is a huge gap in performance between the strongest and weakest staff performing the same or similar jobs in most organizations. We call this performance differential the People Performance Gap. The People Performance Gap is typically 25%-100% in simple jobs and as much as 500%-1,000% in complex and high-responsibility positions requiring broader and higher-level skills. To illustrate this point, the Chief Information Officer of a leading company told us that "my best programmers produce ten times as much code, of better quality, than my least-effective keepers." He then went on to say "there is little correlation between what our programmers produce and what they are paid." Closing the People Performance Gap can provide breakthrough increases in profit at most companies, even if their profit is already at all-time high levels. Managers and the strongest performers often spend much of their time fixing problems caused by the weakest performers. This creates an enormous drag on organizational performance and serves to de-motivate top performers, a situation few organizations can afford to tolerate. Let's look at another example of the People Performance Gap. At a bank with seventy-five geographically dispersed branches, there were two hundred branch staff members whose job was to sell products and provide customer service. The bank encouraged these people to sell consumer loans and measured results of each person. The consumer loan sales results for one recent year clearly illustrate the People Performance Gap concept (the

results are for people who were employed in their positions for the entire year recorded). The top five performers each submitted over 175 loan applications during the year, averaging almost one application per day. The overall average number of consumer loan applications taken by the two hundred sales people for the entire year was twenty-five, well under one application per week per employee. The bottom 25% of the sales staff (50 people) each accounted for five consumer loan applications or less for the entire year, with almost half of this group registering no sales at all. The measurements were collected by a central loan processing group, and they were not shared with the branch managers and sales staff. Prior to identifying this People Performance Gap opportunity during a performance review of the bank, the leading producers received minimal rewards for achieving top levels of performance. The weakest performers faced no consequences for their poor performance. The People Performance Gap concept also pertains where there only is one person in a job (e.g. President or CEO). The person in the job can not be measured against others currently in the job, but their performance can be measured against peers in other similar companies, against their predecessor's and against performance goals they and others (e.g. board of directors, stock analysts, shareholders) have established for the job. By any reasonable measurement, during the 1980's and early 1990's many Fortune 500 CEOs performed at the lower end of the People Performance Gap spectrum. They continued to manage within the old paradigm while the 'new-world order' in competition and technology was rapidly developing around them. Many boards finally faced up to the problems and hired replacement CEO's to get their companies back on track, often with very positive results. Closing the People Performance Gap enables organizations to get more done with fewer staff and to significantly improve quality and customer service. For many companies, the bottom line impact of the People Performance Gap is huge. Ineffective sales calls translate into lost opportunities. Based on a wide range of consulting reviews, we have found that twenty to thirty percent of a company's staff cost, including management and employees, is spent fixing things, performing rework, correcting errors and handling customer complaints because something wasn't done right the first time. Most of this excess staff cost is due to errors produced by people. Even when the cause of a problem can be traced to a failure in technology, there is a great likelihood that an error, lack of action or poor judgment on the part of people caused the technology to fail.

Reference http://www.quantisoft.com/Articles/Ppg.htm http://www.trainism.com/identifying-bridging-performance-gaps.html

Identifying & Bridging Performance Gaps

NOV

05

Todays Organizations wish to perform at an optimum level. But before a training department can help a business unit improve performance, they must figure out what is the current performance level & what should be the desired level at which organizations are expected to work.

A performance gap is the difference between desired and actual performance. When you know whats missing, you can take steps to fill in or minimize that performance gap.

Desired Competency Actual Competency = GAP ANALYSIS Establishing a baseline becomes imperative when planning organizations training needs.

The best way to plan training needs is to conduct a Gap Analysis. A gap analysis can play a crucial role in planning the training needs for your organizations quality system. This is a

1. 2. 3. 4.

Determine Desired Competency Level. Identify Actual Competency Level Using Grid System. Conduct Training Programs Setup a Robust measurement criterion.

Determine desired competency level: Desired performance is where you want your employees skills, competency and knowledge level to be. The training department should identify 5 to 10 most important skills for every team in an organization based on the business requirements or goals.

Identify actual competency Level: The training team must use a grid system to help the organization identify the employees current performance level. They should take the list of all the employees & rate them on three parameters of Unskilled, semi-Skilled, fully skilled & over skilled against each competency. Each category should have a definition to it.
Name Competency 1 Competency 2 Competency3

Competency 4 Competency 5 Over Skilled Over Skilled Fully Skilled Un-Skilled Over Skilled Over Skilled Un-Skilled Semi-Skilled Semi-Skilled Fully Skilled

AA BB CC DD EE

Un-Skilled Fully Skilled Semi-Skilled Over Skilled Semi-Skilled

Semi-Skilled Fully Skilled Semi-Skilled Un-Skilled Over Skilled

Fully Skilled Un-Skilled Over Skilled Semi-Skilled Semi-Skilled

Un-Skilled Semi-Skilled Fully Skilled * Competency Over Skilled

Conduct Training Programs: Once the current performance level is identified, the training department takes a decision of conducting training programs for the employees. To help employees acquire the necessary skills and knowledge, a variety of traditional or innovative methods, such as classroom training, on-the-job training, self-directed learning, coaching, mentoring, facilitating techniques, simulations, Instructor led training programs must be conducted.

Setup a Robust Measurement Criterion: By this we mean that the training department can determine when a desired competency or result has been accomplished. Whether each & every objective and goal has been met & what has been the overall quality of outcome. Setting up a measurement criterion is a very time consuming & a tedious process. But once you have understood the overall objective the process becomes a lot easier. Remember the

objective setting in stage should always be quantitative that can be measured. Post training the gap should again be measured & follow up training sessions should identified for employees if the gap is not bridged.