i4cp Study Shows Employees Remain in Their Positions Long After Productivity Has Decreased

High-performing organizations not only weed out unproductive employees faster, but also bring new employees to full productivity in less than a year

Seattle, WA (September 15, 2010) - The Institute for Corporate Productivity (i4cp), the fastest growing and largest corporate network focused on the practices of high-performance organizations, released a new study titled Time to Optimal Productivity that shows a clear delineation between high and low market performing organizations. The study reveals that over half (55%) of respondents from low-performing organizations report that employees often remain in positions after their productivity has begun to wane. The same is true for only about a fifth of those from high-performing firms.

"Sometimes patience is not a virtue, and high market performing firms know it," said Jay Jamrog, i4cp's Senior VP of Research. "They get their employees ready quickly, they avoid employee stagnation and they weed out those who don't come up the productivity curve."

According to the study, high-performing organizations tend to move faster - even in a slow economy. When respondents were asked about the time to full productivity in their companies, 45% of those from high-performing firms said this occurs in 12 months or less, compared with just 32% of those from low-performing firms.

"There are plenty of ways to shorten time to full productivity," notes Jamrog. "Better employee orientation and onboarding, job shadowing, better access to informal learning tools, improved peer coaching and, generally speaking, higher-quality learning and development programs. It all adds up and results in a faster track to full individual productivity."

In spite of the potential productivity gains, the study also found that many companies don't even bother to track time to full productivity. In fact, only about six out of ten organizations use this metric, and high performers are no more likely to use it than the average company.

The important differentiator is that, when they use this metric, high performers use it more effectively. Specifically, they're much more likely to make both termination and recruitment decisions using time to productivity as a factor. "With high-performing firms, it's all about making sure you have the right talent," says Jamrog. "They're more likely to use that metric to get rid of less productive people, and they're likely to use it to gain insights into who to recruit. In other words, they're more structured about who to bring in the door and, if necessary, who to release."

The i4cp study also asked companies about "maximum time in position," which was defined as the maximum amount of time that employees can stay in the same position before their productivity falls off from the optimal level. The study found that this is not a common metric in today's organizations, with over half of participants saying they don't estimate or calculate it for any positions.

"It makes sense to use it for succession planning," notes Jamrog. "You don't want to keep an up-and-coming manager in a job so long they become unproductive there. You want them to have some success and then move them along to the next level."

i4cp's 4-Part Recommendation:

  • Don't measure it unless you need to and know why you're measuring. Too often, companies collect data for its own sake, but weak metrics are worse than none at all. In the case of time to full productivity and maximum time in position, high performers are less likely to use these metrics than are low performers. But, when high performers use them, they tend to have solid talent-management reasons, such as shortening the time it takes for new employees to get up to speed or for high potentials to hit their stride in new leadership jobs. This is directly related to improved business performance.
  • Be rigorous. To calculate maximum time in position, high performing organizations are much more likely to use productivity metrics and work-related time studies. These tend to be more rigorous and objective than the notoriously subjective performance appraisal data many companies collect. High performers use solid data to create managerial expectations and goals.
  • Mine your data. Companies may already have access to solid data that they collect - or could collect - but don't use. Determine what you need and then see if data mining techniques can locate it in existing systems. But take heed: Don't use data just because it's easy to find or calculate. Data that's not highly useful and accurate will only lead to poor decision making. That seems like common sense, but too often companies go with easy-to-find efficiency data rather than harder-to-find effectiveness data.
  • Act on the data. Sometimes this means making tough decisions. High performers are, for example, much more likely to use time to full productivity data to make termination decisions. If an employee is taking far too long to get up to speed in a certain job, he or she may be a poor fit for the organization. But acting on the data also means being proactive. High performers do what it takes - onboarding, job shadowing, teaching business acumen, etc. - to get new employees up-to-speed quickly. They also are more diligent about hiring the right people for the job in the first place and using metrics to make solid quality-of-hire decisions.

About i4cp, inc.

i4cp is the fastest growing and largest corporate network focused on the practices of high-performance organizations. Through a combination of peer networking, human capital research, tools and technology, we enable high performance by:

  • Revealing what high-performance organizations are doing differently
  • Identifying best and next practices for all levels of management
  • Providing the resources to show how workforce improvements have bottom-line impact

With more than 40 years of experience and the industry's largest team of human capital analysts, i4cp is the definitive destination for organizations seeking innovative ways to improve workforce productivity. For more information, visit http://www.i4cp.com/

Erik Samdahl
Erik is the head of marketing at i4cp, and has nearly 20 years in the market research and human capital research industry.