Weak Performance Differential

CALCULATING YOUR TEAM’S WORTH (1st of 3)

How to Separate the Strongest from the Weakest

There are four easy steps to calculating an employee’s monetary worth.

1. Determine the Average Employee Worth (AEW) – This number is calculated by dividing the total revenue of the department or organization by the total number of employees. For example, a design team of 5 with a revenue of $600,000 equals an AEW of $120,000.
2. Determine the Weak Performer Differential – Compare the AEW to each employee’s actual revenue. This will create a best to worst ranking for each department. It will also show how strong the strongest are versus how weak the weakest are in terms of performance.
3. Determine other costs – This includes other performance considerations such as absenteeism, missed deadlines, employee attitude, errors, and theft. These considerations may vary based on the job.
4. Determine if weak performers can be made into strong performers. Many times, weak performers can improve quickly and easily through coaching, retraining, and frequent performance evaluations. Other times, weak performers are simply draining time, morale, and revenue from an organization. In this case, the hard decision to release the employee will need to be made.

When an organization learns the true worth of their staff, everyone benefits. Strong employees are validated through data. Weaker employees can either be encouraged to improve or can be removed from the company, if that is the best option for the organization.

Next: Ways to manage employees who are simply not working out.

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