Workplace Woes: A performance value matrix on who to fireFebruary 5, 2017
THE HIRING, FIRING, PROMOTION PROCESS IN COMPANIES: The Performance-Values Matrix by Dr. Cameron Sepah
VP/Founding Team at Omada Health. Professor at UCSF Medical School. Startup & VC Advisor.
1) Incompetent Assholes (Fire Fast)
Incompetent assholes are not only low-performers at your company, but their behavior is incongruent with your company values. In this matrix, they are in the lower-left quadrant and thus can only earn 25% of the maximum employee evaluation score. Hopefully, there should be very few of these folks at your company, but occasionally a few will slip through the hiring cracks, or something may have happened that caused performance and values-congruent behavior to permanently degrade over time. Nevertheless, they both sap employee motivation by not contributing equally to the workload and are toxic to employee morale. Needless to say, incompetent assholes should be identified and fired as fast as possible.
2) Competent Assholes (Remediate or Separate)
Competent assholes are high-performers, but exhibit behavioral tendencies that are incongruent with your company values. Given that “asshole” is not a clinical term, I will define it here as someone who lacks empathic behavior to the point that it causes interpersonal issues (and will explain the three types in Part 2 of this post, “Anatomy of an Asshole”). The biggest mistake that I see companies make is that they will retain competent assholes because they are seen as critical to the company or difficult to replace. However, by doing so, they not only passively reinforce the competent asshole’s behavior by tolerating and promoting them, but they implicitly send the message to the rest of the company that you can basically get away with murder so long as leadership believes you to be indispensable. You can imagine what kind of culture this creates over time. In contrast, using the Performance-Values Matrix, an employee who’s competent but a complete asshole can only earn 50% of the maximum employee evaluation score, given that the other 50% of their evaluation is based on their values-congruent behavior.
Of note, while I distinguish between competent and outstanding nice guys [gals] in the matrix, I do not do so for assholes. That’s because I believe it is impossible to truly be an outstanding asshole. For example, there is a myth of the “10x engineer” in Silicon Valley where a truly talented engineer is as valuable as 10 average ones. Even if one engineer could possibly do the work of 10, if they are an asshole (especially in a management position), they will decrease the performance of the people around them to such an extent that their team’s net productivity will break even or be at a loss long-term.
There’s a reason that Professor Sutton called it the “No Asshole Rule,” and that is because exceptions shouldn’t be made, otherwise it shows your values are merely aspirational. The solution for competent assholes is what I call “remediate or separate”. Despite the fact that these folks are strong performers, it should be made clear that value-incongruent behavior is not tolerated and they will need to remediate their behavior in a measurable way within a limited time.
Thus, competent assholes should be put on what I call a “Values Improvement Plan” (VIP). 360° reviews, from an employee’s manager, peers and direct reports, are a great way to assess improvement, or else be separated from the company. The reason I like giving these folks a chance is that sometimes employees that are not too inflexible (or pathological) to change can improve when they realize that their job depends on it. Often times, this requires entering therapy or executive coaching with a skilled psychologist, which is worth its weight in gold if the employee is willing to change.
3) Incompetent Nice Guys (Manage or Move)
Incompetent nice guys and gals are the exemplars of your culture and are well-liked by almost everyone, but unfortunately are not high-performers. Like competent assholes, completely incompetent nice guys also can only earn a 50% maximum possible employee rating. That’s because it is nearly as much of a sin to tolerate incompetent people as it is to tolerate assholes. Giving free license for someone to underperform just because they are kind or likeable sends the message that your company is not a meritocracy, and that it’s more important just to be socially skilled (or at worst, be a brown noser). However, the solution here is different than with component assholes, in that the best solution is to manage or move them.
Incompetent nice guys and gals should be put on a traditional performance improvement plan (PIP), and skillfully managed in order to give them the training and feedback to improve their abilities. One solution I’ve seen work is to move them into a different role when their incompetence stems from a fundamental disconnect between their strengths and their current role’s demands (e.g. mediocre social skills in a client-facing role, though the person may be an analytical whiz if moved to a more technical role). Of course, if that is not possible or does not work out, they should also be separated from the company. Helping incompetent nice guys and gals to find a position that is a better fit for their strengths, is ironically, the nicest thing you can do for them.
4) Competent and Outstanding Nice Guys (Praise and Raise)
Hopefully most of the employees at your company are both competent and nice, and it is important to note that in Performance-Values Matrix, you must exhibit both behaviors in order to be in the top-right quadrant. Competent nice guys and gals earn up to 75% of the maximum employee evaluation score, and should be praised and given the opportunity for advancement. But in order to set the bar high, employees should only earn the full 100% score if they exhibit both outstanding performance and value-congruent behavior. They are what Sarah Tavel of Greylock calls the “mitochondria” of startups, because they are the company’s power plants—adding value beyond their job description and responsibilities by asking and doing what is best for the company.
Given how rare these individuals are, founders should go out of their way to attract and retain them. By building this designation directly into the evaluation matrix, outstanding nice guys and girls should be formally recognized and rewarded with raises and promotions. These are the current or future leaders of your company, and need to be nurtured and cherished given they are the foundation for your company’s performance and morale.
Call to Action (Reinforce Your Culture)
When leaders become Machiavellian and hire and retain mercenary employees is like a Hermann Hesse novel reaching “the place on the journey where everything falls apart” and the company’s culture degrades. While company engagement scores typically decline as they scale—given they have to hire quickly from a limited talent pool and are too overworked to fire quickly—this does not have to be an inevitability.
Culture can only improve with a baseline culture of openness, where people feel they can come forward and share concerns or opportunities for people and teams to do better. If people aren’t trusting of what happens when they give feedback, then reviews will be “positive” and not provide any useful information. This requires both anonymous surveys and the promise that aggregate feedback is valued and will be acted upon.
So if you want your company’s culture to be congruent with those noble aspirations written on your company wall, you must continually assess how well your employees are behaving compared to those aspirational values, and develop ways to bridge the gap between aspiration and practice. I believe the best way to do this is to directly reinforce value-driven behavior, including making it an integral part of employee’s reviews and weighting it as highly as performance.
As the old saying goes, you reap what you sow. As leaders, you get the behavior that you reward.