Pareto and Your Business
Some of the most useful ideas in business are based upon the Pareto Principle (also called the 80-20 Rule or the Law of the Vital Few.) It basically says that roughly 80% of the effects will come from 20% of the causes. This is a very useful principle when trying to decide how to tackle process improvement. It is also very useful in considering your employees.
Some HR corollaries: 80% of your employee-related problems come from 20% of your employees. 80% of the work is done by 20% of the people. The numbers won't hold precisely true in your business, but the point is that small numbers of people on each end of the scale have a relatively large impact on your organization.
Think of your lowest performing (or most troublesome--they aren't always the same person) employee. If you didn't have to spend the time dealing with that person's issues, how much more could you get done in a day?
Think of the highest performing person you have. If you could duplicate that person, how much more revenue could you generate or how much more efficient could you be?
A lot of HR programs should be focused on eliminating the bottom and expanding the top. If you could replace that one low performer with a high performer, what difference would that make in your business? This should be a key focus of your HR strategies--is it?
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