One unintended consequence of the current
economic situation is the failure of many
organizations to effectively manage employee
performance. How so, you ask? There are at
least three ways this is happening.
First, the obvious one. When times are tough,
organizations, and by extension, their
leaders, who want to support, encourage, and
reward good performance have fewer resources
with which to say thank you. Raises, bonuses,
perks, trips, and other incentives become
scarce. This shouldn't stop us from saying
thank you, but, as we all know, it often
does. Leaders whose imaginations are
constrained by equating appreciation with
stuff that costs money are at a real loss
here. What they lose, in the short term, is
the engagement, the willing and enthusiastic
Discretionary Effort (we call it Oomph!) of
those who are inclined to go the extra mile.
What they'll lose when the economy recovers
is the people themselves, who, aided by a
healthier employment picture will vote with
their feet, taking their act elsewhere for a
A second problem is that well-intentioned
leaders, who know that coaching and regular
performance feedback are essential to
developing good performers, stop doing it.
They're now performing the jobs of two (or
more) people as it is, and they simply find
it too hard to make time for formal
performance evaluations, let alone real-time
But one of the most insidious
workforce-related consequences of a bad
economy arises from another often
well-intentioned practice, ostensibly
designed to minimize the need for layoffs.
And that is the dreaded (gasp, scary organ
music) hiring freeze.
On the surface, it makes impeccable sense: we
want to avoid layoffs at almost any cost, so,
rather than sending people home, let's just
not add any new positions, and in fact, let's
not fill the positions of those who leave, or
get fired. The hope is that the hiring freeze
will prevent the need for layoffs and the
attendant pain and misery.
Local, state, and provincial governments are
doing it. Universities, and - yikes -
hospitals are doing it. So are pharmaceutical
companies, American Express, Boston's Museum
of Fine Arts, Microsoft (although they deny
it), the huge advertising conglomerate WPP,
and even ESPN. Literally thousands of hiring
freezes have been announced in the last year,
and undoubtedly thousands more have been
enacted - without announcement.
True hiring "freezes" are fraught with
problems. Chief among them is the assumption
that the blame for an organization's budget
crisis lies at the feet of its workforce.
Stopping all hiring, when hiring isn't the
problem, is like treating swine flu with an
Secondly, employers stuck in an arbitrary,
no-exceptions "freeze" mode won't even be
looking for that really great talent, who
will be hired by a competitor who's
still on the hunt.
But here's the biggest, baddest, ugliest (and
most dangerous) problem: Managers faced with
a hiring freeze, especially one that's
rigidly applied, are inescapably tempted to
hang onto anyone capable of casting a shadow,
without regard to talent or performance!
The following is a true story: We've got 12
people on this manufacturing shift. We could
use 14, but we can get by with 12. Two of
them are doing lousy work, and the other 10
know it. But the 2 slackers are getting stuff
out the door. If I get rid of them, I won't
be allowed to replace them. So they're
staying. And no, I don't have time to train
them better, or to even tell them they're
doing a lousy job.
This one's true, too: My nurses are running
their feet off on this floor. I've got one
whose attitude stinks. But I'm not saying
anything. We've got a hiring freeze, and
she's better than no nurse at all, which is
what I'd get if I let her go.
And this one: We're already under a
freeze and I've been told to let one person
go. Of the 12 people on my team I've got 2
non-performers and a kid (a good worker) who
will be leaving in 2 months to attend
college. I whack the kid because in 2 months
I would have lost him anyhow.
So - what happens? We "put up with" things
we'd never tolerate under ordinary
conditions. The good workers see it and can
only conclude that the boss's standards have
slipped. Some will be tempted to follow suit.
Others won't like what's happening to the
neighborhood and will begin plotting their
Solutions? Here are a few thoughts:
* Limiting hiring activity is one thing.
"Freezing" it is another. There's nothing
wrong with a significant hiring dialback, to
preserve the jobs of your good performers.
But let's engage our brains in staffing the
enterprise. We know it's hard work. We've
done it. But as John Houseman intoned in the
wonderful flick, Brainpower, "You get paid to
* In good times and bad, be as judicious
about adding to headcount at work as you are
at home. Just because you can add to the
payroll doesn't mean you should.
* Never base managers' pay on the number of
people they supervise. That one's easy to
figure out, yet most organizations actually
* Imagine that we're shouting this one: If
you're a manager, do your job, for Pete's
sake! Irrespective of the business conditions
of the day, manage people's performance! Give
them timely, useful feedback. Tell them when
they're screwing up. And when they're doing a
great job. Promote, or otherwise find
to reward those who deserve it.
* We're still shouting, and we've saved the
most important piece of advice for last. By
all means, pluck up the courage to terminate
those who've demonstrated that they shouldn't
be working here any more. Whether you've got
a freeze or not!