I opened up today’s Wall Street Journal to find more bad economic news of corporate layoffs and job cuts abound.
It is really bad folks.
These are the worst economic times my generation (X Generation) has ever seen. This quarter (Q4 ‘08) is likely to be the worst economically, and the after-effects will be felt for the coming 12-24 months. One key sign of the “after-effect” will be the continued business layoffs. Everything economically happens after the original impact. That is why it is called the “lag effect”.
Here is my worry. Companies are making speedy job cuts – Especially the harder-hit sectors such as finance. I am concerned because in my consulting experience, I know one thing with dramatic certainty: most organizations have no clue as to the true potential of their talent. In other words – most organizations have no idea what their “talent inventory” is.
How do companies decide who stays and who goes? On a good day, most organizations use anecdotal performance data that does not accurately represent the true potential of an employee team member. Instead, employers are relying on the “gut feel” of managers or decision-makers who decide “who stays and who goes”.
In other words – those who are liked by the person making the “who stays and who goes” decisions get to keep their jobs.
“Who goes” is typically going to be a cross-function of who is more of a perceived liability to the organization coupled with who is out-of-favor with the decision-makers deciding on the job cuts.
The “Who goes” decision is not very scientific at all. Needless to say, this is lousy recessionary Talent Management Strategy.
Why? Human beings are inherently biased. With a particular Client in mind, I think of the nicest people who are liked the most by the management – these people get to keep their jobs… For the record, not everyone listens to our suggested Talent Management Strategy. That strategy is simple – keep the best talent possible.
Instead most organizations and ultimately the management retain the people they like the most – at least initially. In this particular instance (and in general) these “well-liked people” share one thing in common – they are nice people AND their performance is the lowest. Will they be cut first? They should be, but they will not be cut. They are too nice. Will they go in the second round of corporate layoffs? Would they go in a downturn? That depends. It depends on if the economic problem is too significant and how much their manager is willing to go to bat for them.
The net result is lower performers stay. When low performers stay, the inherent long-term risk to the organization is obvious.
What can be done? Maintain a “talent inventory” at all times in the event that corporate layoffs become necessary. Match the talent with the performance. If there is a spread between actual performance and the potential of the team member, review the situation. Can the employee team member be inspired or motivated?
It is critical that a “talent inventory” be maintained at all times. Through a “talent inventory”, a company can better manage and understand the true potential of each team member. In an economic downturn, the company can compare the existing talent inventory to the company’s true economic needs. The result is better planning for the economic downturn – targeted layoffs and job cuts. An additional benefit is the maximization of employee performance today and tomorrow.
What can you do?
· Compare each team member to the Job Benchmark.
· Implement customized coaching plans to address performance gaps.
· Don’t let brown-nosing impact your talent management strategy.
It is not too late to understand the true potential of your talent and avoid job cuts based on likeability instead of performance and potential.
Give me a call if I can help.
Now go Maximize Possibility!
Other blog posts you may be interested in:
Is "Brown Nosing" Encouraging a Culture of Mediocrity in Your Organization?
10 Ways to Recession-Proof Your Job in a Recession
Four Tips for Improving Employee Training and Development in a Down Economy
Four Tips for Hiring During a Recession
Change Your Game Before Someone Does For You
Chris Young helps organizations Maximize Possibility through talent management, cultural transformation, and strategic intervention. Bring Chris in today!
