Employers lose £32m a year tolerating poor performance

UK employers waste more than £30m a year on under-performing staff, according to exclusive research by Personnel Today.

The Tough Love survey of 800 HR professionals, carried out in conjunction with consultancy Chiumento, reveals that 96% of respondents have issues with poor performance, with 29% admitting that it is a major problem.

On average, 16% of staff in the organisations surveyed were rated as poor. When calculated using the respondents’ average wage of £22,000 and the average company size of 9,000 staff, this equates to a waste of £32m across the UK. The public sector is the main offender in not dealing with poor performance – 63% of respondents claim under-performing staff are not tackled as it is accepted as part of the culture.

Worryingly, 82% of respondents had reviewed their performance management procedures in the past two years, but were still wasting money on staff who were not up to scratch.

Doug Crawford, head of employee engagement at Chiumento, said that the reason organisations continued to have an issue with poor performance was their tendency to take an “over-mechanistic” view of managing their employees.

“The reaction to poor performance in organisations is often ‘let’s fix our performance management system’. But you can’t do the same thing over and over again and expect different results,” he told Personnel Today. “It’s easy to change a process, but the hard thing is to change the culture and management behind it.”

Two-thirds of respondents placed the blame on line managers, who spend an average of 1.6 days a month tackling poor performance, rising to more than two days in the health and retail sectors.

This comment from an HR professional was typical: “We need managers at all levels who actually have even the most basic understanding of how to get the best out of staff. We have moved on from the 19th century – if only they would notice.”

A popular way to shed dead weight

The Tough Love survey reveals that one of the most common ways of dealing with under-performing staff in organisations is to ‘manage them out’.

This approach is most common in the IT sector, where 54% of survey respondents managed out poor performers. The health and education sectors also took an extreme view of poor performance, with just under half choosing to get rid of problem staff.


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