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Jump! Employee Performance On Trial


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Prelude to a Crime

Imagine the CEO of a large company calls a random group of 100 employees together into a meeting. These 100 people are told only that the meeting is important. Once everyone is seated the CEO walks up to the podium, looks around, and suddenly says one word: "Jump!"


 

Witness for the Prosecution: The Pareto Principle

Vilfredo Pareto, an Italian economist living in the early 20th century, observed that 80% of the wealth in Italy was owned by 20% of the people. Pareto called these 20% the "vital few." This rule has been used to explain why 20% of salespeople can create 80% of all sales. See:


http://www.pinnicle.com/Articles/Pareto_Principle/pareto_principle.html


Following this principle we might speculate that the majority of the employees in the company meeting will continue to sit in their chairs after their CEO tells them to jump. Some will think about jumping (but won't actually jump); others will plan to jump soon (but still won't actually jump); and the rest wait for the punch line. The bottom line? Assume Pareto is right and only 20 people actually jump.


 

Witness for the Defense: The Deming 85-15 Rule

W. Edwards Deming, the celebrated quality specialist and business management theorist, believed that "85% of a worker's effectiveness is determined by the system he works within, only 15% by his own skill." See:


http://www.well.com/user/vamead/demingdist.html


Following this principle we might speculate that the CEO should restructure the environment of the meeting, or rethink how she is communicating with her employees, if she seriously expects them to actually jump. The bottom line here? Assume Deming is right and 85% of performance and non-performance is explained by the system, while 15% is attributable to the presence / absence of employee skill.

 


The Verdict

The charge is failure to perform: 80 people failed to jump. A reasonable verdict should unite the insights of both Pareto and Deming. My thought process in arriving at a verdict is as follows:


Deming would say that 85% of the 20 jumpers (17 employees) performed because, somehow, the system worked for them, or maybe they just got lucky. He would also say that 15% of the 20 jumpers (just 3 employees) performed because of innate skill, regardless of the system. These 3 individuals are the real deal and the crucial point of agreement between Pareto and Deming.


For the 80 non-jumpers Deming would again say that 85% of non-performance (68 people) relates to the system not working for them, or maybe they were unlucky. Finally, 15% (12 people) didn't perform because they just don't get it.


Therefore, the verdict must be as follows: obviously not guilty for the 20 jumpers; not guilty by reason of the system for 68 of the 80 non-jumpers; and guilty as charged for those 12 people who don't get it no matter what. Seventeen of the 20 jumpers will be under suspicion for just getting lucky.


What is useful about this analysis is that it shows how corrective action (change management style) applied to the largest group of 68 non-jumpers yields the biggest payoff in terms of improved performance. Further, the verdict invalidates the 'common-sense view' that 80 people failed here by showing, through rigorous mathematical logic, that actually only 12 people provably failed.

 


Afterwords and Afterthoughts


Right before finishing my undergraduate degree I began interviewing with several large public accounting firms for a position. One memorable interview was conducted at a job fair on campus. The interviewer had oddly placed his table right in front of a long, dark corridor. At the end of the corridor on each side there were two lighted rooms, one on the left and one on the right.


I greeted the interviewer and he told me to walk ahead of him down the corridor. I did so, expecting him to courteously inform me which room would be used for the interview. He didn't tell me and I continued to walk down the corridor.


Just before my nose collided with the end of the corridor the interviewer suddenly shouted: "Left!" Perhaps it was some non-conformist streak in me that made me turn right instead. I'm not sure. Needless to say I was not offered employment by this firm. In retrospect this was a good thing.

 

LEGAL DISCLAIMER

George Adams
Certified Public Accountant Master of Business Administration
Tel: (207) 989-2700 E-Mail: GeorgeAdams@IntelligenceForRent.com
450 South Main Street: The HQ of IQ
Brewer, Maine 04412-2339

©2015 Copyright George Adams CPA MBA. All Rights Reserved.

 

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