People Audit

Last updated on May 13th, 2019 at 02:39 pm

Your entire employee team must be effective in order to maximize your company’s profitability. I realize that is an obvious statement, but have you ever thought about the relationship between the number of employees on your team that underachieve, and your company’s ability to maximize and sustain a high level of profitabilityω

“Of course we do,” you’re thinking. Then answer this question. What percentage of your employee team is underperforming as it relates to their stated performance expectationsω Secondly, how long have the underperforming employees been working on your team without any of the following:

• A candid performance review.

• A detailed performance improvement plan and/or an employee development plan.

• Education and/or support sponsored by their manager.

• Termination if it is clear the employee’s skill set and/or abilities are wrong for the position and/or company.

Resistant to feedback

Creating an environment of candor is critical when evaluating the overall effectiveness of an employee team. People tend to struggle providing candid feedback because they don’t want to hurt anyone’s feelings, and often times the person receiving the feedback is not receptive to hearing anything that is less than favorable.

In fact, a couple of years ago, I was in a managers meeting at a company where one of the managers, in front of her peer group, made the following statement. She said, “Phil, I just wish my management team would provide me with feedback about my performance in an effort to help me improve and grow.”

Having people on your team open to constructive feedback is a dream come true for a business leader. And at the surface, this question represents the right performance improvement attitude. However, I sensed some gamesmanship going on, so I asked this senior manager the following question, “What if I asked you to step out of the board room for two minutes, and while you were out of the room I asked your peers, the management team, if they feel you present yourself in a manner that suggests you are open to receiving performance related feedbackω What do you think they would tell meω”

After contemplating the question for about 30 seconds, this manager swallowed hard and said that her peers would tell me that she does not present herself in a manner that would suggest she is open to feedback. Then turning to her peers, I asked if they agreed with her self assessment, and they all agreed.

This is an example of someone who is resistant to feedback, not taking advantage of the opportunity to learn and grow. When people are resistant to provide and/or receive feedback, they partially or completely disable the company’s ability to have candid conversations regarding the effectiveness of their collective employee team.

Employee effectiveness audit

One way to assess and gain management consensus regarding the level of employee effectiveness within an organization is to conduct an employee effectiveness audit. This is a quick management exercise that provides a snapshot of how the leadership team views the effectiveness of the collective employee team within the organization. The goal is to ensure your company is maximizing the effectiveness and competitiveness of the organization through the proper assessment and development of the employee team. Here’s how this works.

Pull the management team together and ask each person to respond to the following questions:

1. Considering the total number of employees within the entire company, how many employees do you feel are underperforming according to the defined performance expectationsω

2. Translate this number into a percentage. What percentage of the total employee team is underperformingω

3. Considering the above percentage, what kind of impact do you think that percentage is having on your company’s ability to perform financiallyω

There’s more to the employee effectiveness audit than this, but you get the point. With this process, we are trying to create visibility and consensus regarding the state of employee effectiveness within an organization.

We are also trying to create the correct sense of urgency as it relates to addressing underperformance within companies. Lastly, we are trying to help management understand the very real connection between their ability to reduce the number of underperformers on their team, and their organization’s ability to achieve a high level of sustainable financial performance.

In conducting the employee effectiveness audit, it’s not unusual to find management teams that self-evaluate and conclude that 20 percent of their employee teams are underperforming. Assuming this is an accurate assessment, how well can a management team expect their company to perform when 20 percent of their employees under-performω

In short, this exercise is designed to create dialog and action within a management team that has allowed underperformers to linger for an extended period of time.

Phil Mydlach is the owner of Mydlach Management Advisors (, a corporate planning and performance improvement practice in Waukesha.
He can be reached at (262) 662-4646 or

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