The Theory of Performance outliers The following process is a method to take out most (but not all) the

“gut” feel regarding where your reports are regarding performance. With this you can follow when someone is over or under performing for a period of time. Any outlier should be pulled back in line in less than 6 months or you run the danger of losing an out performer or having to lay-off an under-performer. There are two graphs that you need to review: Time utilization of others

An individual’s Time utilization of other team members
20 18 16 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10

Junior

Above the line is a Negative – the report requires too much of other peoples time.
CFA Others Time

Below the Line is Positive – the 0 1 2 3 report uses less of others time.

4

5

6

7

8

9

10

Senior

The things that take other user’s time are: 1. 2. 3. 4. 5. 6. Training Mentorship Errors\Refactoring (developers) Support of Work Man management Absenteeism

Time above the line It might take a couple of months to notice a report has gone over the line. The report should be spoken too at this point. If after four months the report should be repeatedly informed of the long term

consequences of this behavior. If the report is over for 6 or more months the disciplinary procedures should begin. Example: In the above example a report is taking the CFA exams. He has more time to train, which is OK but remains blow the line. However, as he studies he might not give up other social activities and after a while this affects his work quality, he is sick more, and others have to clean up his errors. He is spoken too and he makes more effort to cut back in his personal life and in 4 months he falls back under the line. The salary\knowledge ratio

20 18 16 14 12 10 8 6 4 2

The Salary\ Knowledge Ratio
Senior Above the line is a Negative – the report requires too much of other peoples time.

Report #1

Ratio Cost Reduction

Junior Below the Line is Positive – the report uses less of others time.

0
0 1 2 3 4 5 6 7 8 9 10

The ratio of Salary, relative to the rest of the team & the market, to Knowledge is an important tool to watch for under performers and those that might leave for higher pay. As an employee’s relative salary increases you should see them move along the line. Time above the line It might take a couple of months to notice a report has gone over the line. The report should be spoken too at this point. If after four months the report should be repeatedly informed of the long term consequences of this behavior. If the report is over for 6 or more months the disciplinary procedures should begin.

Actions to take can include to get the employee below the line: 1. Training 2. Mentoring Example: Change in Relative market An employ can move above the line if the $ price of reports gets cheaper. In the example above “report #1” Salary to knowledge ratio remained static but the market for knowledge become cheaper. Now this employee is expensive relative to his peers. In this case the first thing to do is train the report to improve knowledge and move him back below the line. Also, here you might have an employee who does improve their knowledge and move back below. Now the employee feels they deserve a pay rise. It is important that you do not do this as you set them up to lose, as the move back instantly moving them above the line. To this end it is important to give an employee move responsibility and training and see them move a ways above the line before giving them the pay rise.

Relationship between the two graphs In the first example the CFA candidate was over utilizing others however as he studied the CFA his Salary to Knowledge ratio improved. This worked to his advantage. Now in the second graph Report #1 received more training, mentorship and support from his peers. So now his utilization of others increases. This is a very dangerous situation for an employee as they above the line on both charts and they must work hard to get under quickly.