GE super executive Jack Welch was a firm believer in ranking employees and annually eliminating the bottom 10%. We agree with Welch that there should be no hiding from performance. Ranking and rating workers makes sense, provided that you meet these conditions:

1. Get the data needed to identify good performance. This is easy in sales, but more difficult in administration.
2. Make the data available in a format that allows managers to understand and use it.
3. Have a dialogue with employees, setting forth expected performance benchmarks. Ask yourself, “How would an employee know if they were doing well or poorly without having to ask me or without my having to tell them?” If they can answer that question, you’ve defined your performance benchmarks clearly.
4. Prepare draft guidelines for ranking and rating and then hold a townhouse meeting where employees can express their concerns about it. Consider answering some of their fears in advance with Frequently Asked Questions (FAQs) that might answer such inquiries as:
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     • How does our performance affect the ranking?
     • How do we know if the rankings are accurate?
     • What do the rankings mean for our pay?
     • What if we disagree with a ranking?
     • What if we feel that our contributions to the company aren’t presented accurately in the ranking guidelines?
     • What will you do with good performers — and poor ones?
     • Who gets to see the list? The answer should be only those in the company with a need to know. It might not be a good idea to share the rankings and ratings from different departments; the more open your environment, the more sharing that can go on.

Acknowledge that there will be some fears on all sides. Identify and address them up front. If you’re acting with integrity, the only fear that should remain is that of non-performance.

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Unfortunately, most managers spend a lot of their time with the poor performers in an organization and often ignore their top people. Just because your best workers cause the least amount of drama doesn’t mean that you should ignore them! In fact, they might be capable of even more effective performance if you give them just a modicum of attention. Stroke their egos. Let them know you’re proud of the work that they’re doing. Find out if they have “best practices” that they’d be willing to share with others in the organization. If necessary, carve out time on your schedule to nurture the best. Whatever you do, give them the attention they deserve.

We recommend that employers conduct pre-hire and return to work “fit for duty” exams. To balance the employers’ need to know with the employee’s right to privacy and disability protection, the EEOC issues guidance in Enforcement Guidance on Disability-Related Inquiries and Medical Examinations. In the case of Indergard v. Georgia-Pacific Corp. the 9th circuit helped clarify the distinction with physical agility exams which are not subject to the guidelines.

Determining whether a test is a medical examination depends on these factors:

• Whether the test is administered by a health care professional
• Whether it is interpreted by a health care professional
• Whether it is designed to reveal an impairment of physical or mental health
• Whether it is invasive
• Whether it measures an employee’s performance of a task or their physiological responses to performing the task
• Whether it is normally given in a medical setting
• Whether medical equipment is used

The EEOC Enforcement Guidance states that, although in some cases a combination of factors might be relevant in determining whether a test is a medical examination, in “other cases, one factor may be enough to determine that a test or procedure is medical.” It then provides a list of tests that are considered medical examinations, including “blood pressure screening and cholesterol testing” and “range-of-motion tests that measure muscle strength and motor function.”

The EEOC Enforcement Guidance states that certain employer-required tests are generally not medical examinations – including physical agility tests, which measure an employee’s ability to perform actual or simulated job tasks, and physical fitness tests, which measure an employee’s performance of physical tasks, such as running or lifting – as long as these tests do not include examinations that could be considered medical (e.g., measuring heart rate or blood pressure).

In the Indergard case, the court ruled that the employer did have to comply with Medical Examination guidelines. Click here to read the case.

Employer after employer is faced with hiring low wage earners who are seldom motivated toward high performance. Except for workplace newbies, most low wage earners are there precisely because of their lack of motivation, creating a classic Catch-22 for employers. If it’s true, as the saying goes, that “I’d rather have ignorance on fire than knowledge on ice,” how can you turn up the burners on low wage earners without increasing turnover? Here are three suggestions:

1. Pay them a bit more. There’s no better example than the In-N-Out hamburger chain located throughout the Southwest. They attract the best in terms of low-wage talent largely by advertising that they pay at least a dollar per hour more than their competitors. Because low wage earners are motivated by survival, security, and the need to belong (in that order) the extra pay makes far more difference to them than it might to someone earning three to five times that amount. Pay them the extra money with the understanding that they’ll be excellent employees. Take a look at their web site www.in-n-out.com.
2. Show them that there’s a way up. Whether it’s a landscaping business, a retail operation, or telephone bank, every company needs managers and supervisors. Show employees that there’s a career path for them if they follow guidelines and expectations, including training and experience. Offer examples of other employees who have climbed the corporate ladder and the path they had to follow. Have those employees act as spokespeople for career motivation.
3. Help them belong to something larger than themselves. A classic example is Service Master: They don’t just clean buildings; they provide Service. A sense of belonging enhances cohesiveness and communication, whether it comes from a corporate theme, company uniforms, team sponsorships, or community activities. By the way, don’t assume that you know what your employees want to belong to: Ask them.

Here’s what I’m doing with my employees to manage more effectively in this economy.

These ideas make sense for your organization, no matter its size or industry:

• Be very clear with workers about how the business makes and keeps money. Although I’ve always had open-book management, to help employees understand the numbers that much better, I had them watch the HR That Works The Accounting Game Webinar. You might want to have at least your management team do the same thing.
• Refocus your objectives. This is a good time to reestablish your core values. In our recent webinar, The Integrity Dividend, Cornell University professor Tony Simons advised members to focus on no more than three to five core values. Make these points memorable and brand them as often as possible. Then ask a simple question: How does this activity help or hinder moving toward these values?
• Increase your productivity. Eliminate any time wasters. Whether it’s a MySpace chat or shopping online, there’s simply no time for it in today’s workplace. We’re tightening up our standard operating procedures, job descriptions, benchmarks, and 90-day game plans. If you’re an HR That Works member and haven’t yet done so, please watch my Training Module on Performance Improvement.
• Work on your business. In my business, the summer months are generally slow. Every year, we use it to work “on” the business. Right now, we’re all having an early summer and I believe that smart companies will use the slowdown to strengthen their operations. As the economy recovers, your company will be better positioned for growth and prosperity.
• Live up to your commitments. Tony Simons reminded us about the risks associated with making “casual commitments.” In my workshops I talk about the trap of heroes being over committed. When we over-commit, we produce a lie and then the drama begins. So, be clear about what you’re committed to, don’t over commit — and then walk the talk.
• Create some positive dramas. Lord knows we’ve had enough of the negative ones! Don’t allow your business to wallow in some collective pity party. Create a fun committee. Have a creativity day. Let your employees’ kids do artwork that can be displayed in one of your hallways. Create some “positive energies” and you’ll get some positive results!