Greta Roberts suggests to Alan Hosking that employee development is not all it’s made out to be.
Employee development is a massive part of work life. Why the controversial view?
Our predictive workforce assignments yield staggering results, saving/making businesses millions of real, measurable dollars. Often this yield is in a single project. Business ROI with these predictive projects is so significant, that some of the findings may challenge some concepts we hold so closely.
Large organisations spend millions on training, coaching, mentoring, re-training and competency development programmes. We do this believing employee development programmes can train someone to better or even great performance. It seems to make sense. And, the only option a business has after hiring someone is try to develop employees to greatness. Better training, better managers, better raises, better perks, better culture, better benefits, more time off, better work life balance, more and more and more that the organisation needs to do, to prop up and hopefully “develop” the employee into being a better performer.
Are you suggesting that’s all a waste of time and money?
Here’s the thing – We recently completed two analytics studies quantitatively analysing sales rep. performance. Among other goals, we analysed sales rep. performance over time – both before and after training is completed. We documented their sales performance as new hires, during training, and finally after they reached full self-sufficiency in their role.
Both sets of analyses were for sales roles at vastly different types of companies. The first sales group consisted of financial advisors. The second sales group sold web/email and Internet connectivity into consumer homes. Each business measured real sales performance (not performance ratings) over time, during and beyond formal and informal training.
Both companies had made a significant, long term financial investment in formal training and coaching development programmes, to help sales reps to optimise their sales performance.
What did your analytics reveal?
We established that sales rep. performance does not measurably increase over time – even with substantial training and development by the business. What we found is perhaps shocking to many, though we see this time and again in our predictive analytics work across many roles.
In the one case (Figure 1), we did a study of underwriter sales performance. In this case, performance is measured by sales and bookings – so provides a lovely quantitative measure. This is not performance review information, this is actual sales performance in the job. Breaking out data by Performance Clusters, we began to see the true stratification that exists inside this group, and important lessons are evident:
– Relative performance levels were evident very early in tenure, even in the first quarters;
– Growth after initial training was only gradual (if at all) – with the exception of the top performers, after quite some time;
– At the individual level, we did not see underwriters crossing categories or increasing after the first year. Performance patterns were set in very early: and
– The first year, or even six months of performance, appeared to lay the baseline for the rest of an underwriter’s performance.
Analytics results showed that sales rep performance did not measurably increase over time – despite multi-millions being spent on development efforts including training, coaching, competency development and the like.
Top performers began as top performers – and continued to be top performers. The development and experience only made a significant impact on top performers’ sales and bookings over time. Average performers began and continued to be average. Bottom performers began and continued to be bottom.
Training might have had a short term impact, or a small impact. But long term business performance was “consistent” from the beginning throughout their tenure – with the single exception of the top performers who excelled even more once nurturing was applied to the ideal nature for the role.
What of the business cost of developing “Bottom Performers” with hopes of turning them around?
In many of today’s businesses around the world, when a bottom performer unfortunately enters as an employee, massive support systems are engaged to prop up, support, train, coach, prompt and cajole that bad hire into some kind of average performance.
The support systems required are extraordinary – and very, very, very expensive. The best possible outcome is that you can nurture them to averageness, not to greatness.
The only thing your organisation can do, once hired, is to try to develop that low or average performer, hoping to squeeze some kind of value out of them. It’s all you can do once they are hired.
The greatest cost to the business is what could literally lead a company to either mediocrity or wild success.
After five years, differing performance adds up significantly. The results therefore illustrate the power of top underwriters. The top performers each achieve 6.79 times as much revenue for this client as the bottom performers over the course of 12 years. This despite the same training and development being applied and available to all underwriters. This difference is worth mega millions.
Greta Roberts is the CEO and co-founder of Talent Analytics, Corp. in Cambridge, Massachusetts, in the US. In addition to being a contributing author to numerous predictive analytics books, she is regularly invited to comment in the media and speak at high end predictive analytics and business events around the world. She is Chair of Predictive Analytics World for Workforce and Faculty member of the International Institute for Analytics. Follow her on twitter @gretaroberts.
This article appeared in the October 2015 issue of HR Future magazine.