When a position opens in an organization, the inevitable is: Should you hire from outside or promote an employee from within? The answer is simple: Before you ever look to hire externally, you must advertise openings internally and evaluate in-house talent for promotional and or lateral opportunities. If you don't, your existing employees will disengage.
Understanding your existing talent is the key to developing that talent effectively. To that end, you can categorize employees in one of four ways:
Investment employees
Performers
Potentials
Transition employees
This figure shows the relationship between these four types of employees, providing managers with a clear picture of how to move employees from one type to the next.
Knowing how to categorize your employees can help you determine how best to engage and develop them.
Identify investment employees
So-called investment employees are the 10 percent to 20 percent of employees who really matter. They define the standard for exceptional performance, functioning above and beyond the norm. They're your go-to people — the ones you trust the most and who display the highest level of competency.
Your star performers, these employees solve problems, generate growth, are innovative and creative, and inspire others. They actively pursue goals, and inevitably give more than you ask of them. Their potential as employees has largely been reached.
Odds are, you, as a manager, spend the least amount of time with these employees because they're on autopilot. They simply don't need your input. Managers may also “reward” these employees by piling more and more work on them (after all, they're dependable) or, worse, may limit their career progression (“I don't want to nominate Mary for this position because I don't want to lose her”).
But be warned: If these employees are not challenged, recognized, and rewarded, they pose your highest flight risk — which is bad, because they're the employees you can least afford to lose. As such, they're the ones in whom you want to invest — hence their name, investment employees.
To engage investment employees, you need to continue to offer challenges (and rewards), work to maintain their interest, and develop the employees further — for example, coaching them toward promotions. Oh, and don't ignore this group. Just because they don't need your attention doesn't mean they don't want it!
Identify performers in your workforce
Performers, which typically comprise between 30 percent and 35 percent of your employees, are a little like investment employees. They solve problems and manage themselves without requiring much in the way of your attention. They're your solid, steady workers. They do what's expected of them, without causing problems for the business or its clients.
The difference? They haven't yet reached their full potential — although they may, with encouragement and support. In addition, some performers have limited upward mobility, sometimes by choice. Perhaps their potential to grow is limited by skills, or by something personal such as family obligations or an unwillingness to travel.
To engage performers, you must provide opportunities for growth while ensuring that they maintain high levels of performance. The trick is to encourage them to take on other duties and responsibilities, push them to stretch and grow, and provide opportunities for them to get involved with other areas either inside the company or externally.
Or, if the employee's growth is self-limited, that person can continue to perform at a comfortable level, freeing the manager to focus staff-development resources on employees with the potential to move to the next level.
Recognize potentials
Like performers, potentials, which comprise between 30 percent and 35 percent of your talent pool, are employees who haven't yet reached their full potential or performance capabilities. Why? Because they haven't had time to develop.
Maybe they're junior employees, or perhaps they've only recently been promoted to a new level of responsibility. These employees exhibit the behaviors and traits of high performance, but because of a lack of tenure, maturity, skill, or knowledge, they aren't yet producing at optimum levels. Potentials represent your future, but they require additional skill development and tenure.
Engage this group of employees by cross-training and providing growth opportunities. Indeed, these are precisely the employees in whom you should invest substantial training dollars. The objective is to improve performance while maximizing potential.
To that end, try setting and monitoring specific production goals, evaluating their workload (with an eye toward determining whether they're taking on too much), and checking whether more training is needed or wanted. In addition, make it a point to challenge these employees with new tasks and ask them to shoulder work when times are busy.
Why? Because potentials will gain much-needed experience from these challenges, and because this strategy helps you to prevent burnout among your organization's top performers, causing them to disengage.
Identify transition employees
Transition employees are the 10 percent to 20 percent of employees who aren't quite making the grade. They simply don't deliver the type of results or performance you expect, or they exhibit major deficiencies. Maybe the employee is a new hire and just isn't up to speed. Or maybe the employee is technically sound, but has been forced into a job that isn't a good match.
It could be that the employee's supervisor has failed to set adequate goals and objectives. Or maybe the employee is simply satisfied doing the bare minimum. Regardless of the reason, transition employees require constant follow-up. This is okay for the short term, but for the long term? Not so much.
No employees should remain transition employees for the long term. Your goal is to move these employees into functioning roles or move them out of the position. To achieve this, evaluate their performance, offer candid and straightforward feedback, and set incremental goals.
In addition, identify and discuss other potential positions in the company, or lateral moves. A transitional employee can move in any direction — including right out the door.
If you want to disengage your workforce, ignore your transition employees. You'll soon see erosion in the engagement levels of your investment, performer, and potential employee groups. Why? Because these higher-performing employees will know who your transition employees are — maybe even before you do.
Allowing a disengaged, underperforming employee to remain employed, without taking any kind of corrective action, is sure to demoralize those employees who do pull their weight.