Your Employment Budget is too Precious to Waste on the Wrong People

As every one of my clients has heard at one time or another, I plan on writing a book some day, and it’s going to have a chapter entitled “management spends 95% of its time on the 5% of its employees that provide the least value.”   I will certainly need a more pithy chapter title at some point, but be patient with me for now.   Some time into our discussions, people eventually nod their heads and say “yes, that’s true,” and then often launch into a conversation about the number of times that has happened to them.  Unbeknownst to them (but beknownst to us!) we are now adding on to the time we’ve wasted on those same people, well after they are gone.   The corollary to the chapter title is an exercise in simple math, which breaks down to: “we spend almost no time on our best people.”

I could just stop there.

But I won’t.

Let’s use a specific example from an actual client situation (and confidentiality is maintained, because I think I have probably had this exact same conversation, about the same job, and the same type of person, with almost every client in this particular industry at some point in the last 20 years).  Here’s the situation.  A healthcare organization hires medical assistants as its “front line” patient care position.  Very important role, one in which everyone has to do what they are supposed to — or patients are standing in lines, waiting too long in exam rooms, and generally feeling bad about the entire experience.  We may hire fully trained people, or train them in-house, but in any event, every new hire is an investment.  The demographics of individuals who work as medical assistants (typically young and female) already make staffing this job a challenge, because turnover is expected — the objective is to minimize unwanted and unexpected turnover, which is why we always want to be careful.  It takes time to find the right person, and several months on the job before we feel like a new person is ready to be left alone.

So one day someone comes along, with a good resume and great interview skills.  She convinces all of us that she’ll step in and be an asset from day one (point me to the bathroom and show me where the coffee is and I’ll be rocking the clinic!).  We think to ourselves — “a star in the making,” and we actually offer her a dollar an hour more than our normal starting rate.  Couple of weeks go by, and we notice that she is the kind of person who seems to avoid work… always waiting for another MA to pick up a chart, always needing to take a bathroom break when things get hectic.  We counsel her a little, point out things, and for a day or so she’s better, but within two weeks its back to the pattern.  A couple more months go by, some more counseling, more conversations, and now we start to hear “I don’t know what you want me to do,” and maybe there are some tears, so we start questioning ourselves.  Maybe we haven’t been giving clear instructions?  Maybe we need to be more patient?  Now its almost a year later, and one of our doctors comes up to us and says “this person’s performance is unacceptable; she’s not treating patients correctly, I will not have her working with me again.”  Well, that’s serious… more than just dodging work and making everyone else’s life miserable… so to ensure that there isn’t any bias, we make sure to tell her she needs to work with one of our providers who we know to be fair, to corroborate this evidence of a performance problem.  A month goes by, and her name comes up in a management meeting.  We go through the entire history (for me its the first time, of course, but obviously this subject has been discussed many times before), and start talking about what to do about it.  Now we find out that she’s been avoiding working with the other provider, so we don’t have any additional evidence.

After about an hour in this meeting, our boss just throws up his or her hands and says “I’m done with this.  This person is not a fit.  We should have dealt with it two weeks into her employment, when everyone knew it was a bad fit.”  Proper conclusion reached.  Now lets do the math.

How much have we spent trying to make the wrong person fit?  Start with the additional dollar an hour that never should have been spent.  Call it $2,250 (don’t forget FICA and those other taxes).  Add the waste caused by inefficiency in the department (additional staff brought in to cover the workload, etc.).  Probably conservative, but let’s say its costing us about $4 an hour.  That’s another $8320.   Supervisor estimates she’s spent about an hour with her every two weeks, on average – 26 X her hourly “cost” of about $32/hour = $832.  At least four management meetings with an hour discussion of this issue, five people, total hourly cost of about $256, so $1,025.  Oh, and this meeting, where I’m sitting in, and lets round it up to another $500.  This issue has been talked about by at least two people a week for half an hour — various people at various costs, lets call it $50 a week, for another $2,600.  I’m sure there’s more, but that’s enough.

$15,527

That is waste.  Pure and simple.  As business people, its our job to maximize our resources, not throw them out the window.  Do we have an obligation to our employees?  Yes.  To tell them what they need to do, and give them the feedback they need, and if appropriate, the tools to get them up to speed.  How far does that go?  Until its evident that we’ve done enough.  We spent more than 100 hours of time dealing with this person.  That’s two and a half weeks out of our collective lives that we’re never going to get back.

In that same year, in fact, on that same day, someone else probably started in the same job, with less experience and training, and got fully up to speed.   I’m willing to bet that we didn’t spend 100 hours praising that person.  I bet we didn’t stop and say “wow, what a great job,” and give her a $50 gift card to a nice local restaurant.  That would have only taken about 5 minutes, and minimal effort (certainly no agonizing in the back room).  We could have given out about 310 of those $50 gift cards.  That’s 310 praise and recognition moments.  310 chances to say to our best people — “we noticed you, and we appreciate you.”

Yes, people who are doing what they’re supposed to are getting paid to do just that, and maybe we don’t have to give them praise, so we probably didn’t need to spend that $15,357 at all.  But people notice who is getting attention, and some are going to resent that the wrong people are getting it.

Management needs to do the right thing, for the right people, at the right time.  Sometimes that is praise, and sometimes it is recognizing that a person needs to find another place to work.  Your employees are waiting for you to do the right thing.


Edmund ("Ed") B. Ura is the President and Senior Consultant at Merces Consulting Group, Inc.  With more than 25 years of experience in compensation consulting Ed works with Boards and Senior Management to identify their needs and develop programs that attract, retain and motivate employees.  Prior to forming Merces in 1991, Ed was a Consultant with TPF&C (now Towers Watson). 

For more information on performance and compensation management contact Ed at ebura@mercesconsulting.com, or visit www.mercesconsulting.com.