Mike, Author at Fabric LMS

How Knowledge Management Can Avoid the Peter Principle

The Peter Principle at Work

Dr. Laurence Peter formulated the Peter Principle in 1968 as an explanation for why incompetent people get promotions. In his book The Peter Principle, Dr. Peter asserted that “the cream rises until it sours”.

In other words, highly competent and skilled workers receive promotions through the ranks of an organization. They continue to receive promotions until they reach a position they have neither the knowledge nor the skills to perform.

The Peter Principle has long been criticized as simply a neat theory. However, recent research has shown that it’s an accurate reflection of corporate hierarchies. One 2018 analysis of over 53,000 sales staff at over 200 companies found that the best salespeople were the most likely to be promoted to managerial positions – and the most likely to perform poorly as managers. The researchers concluded that “the best worker is not always the best candidate for manager.”

The Peter Principle can be seen at work in the 2005 sitcom The Office. Regional manager Michael Scott, while friendly and outgoing, is nonetheless a poor manager. He makes irrational decisions and wastes a considerable amount of time. However, when Scott acts as a salesman, he continually demonstrates a high degree of intelligence, a winning personality, and a persuasive charm that wins over his clients. It was his strong sales record as a salesman that led Scott to be promoted to regional manager. Now, though, he lacks many of the managerial skills needed in a professional workplace.

The Paula Principle

In 2017, educational philosopher Tom Schuller published The Paula Principle, a follow-up to The Peter Principle that aims to explain why women underperform. According to Schuller, the Paula Principle states that “Most women work below their level of competence.”

Schuller argues that bosses fail to recognize women in particular for their competence and performance. He says women often work in positions that under-utilize their full skill-set.

“Women’s career paths are flatter and more broken, their salaries lower, and their retirement incomes smaller,” Schuller writes. In The Paula Principle, Schuller lists five factors to explain why women underperform relative to their level of competency. These factors range from discrimination to lack of childcare to lack of self-confidence and beyond.

How Over-Promotion Can Derail Your Business

The Peter Principle can have myriad effects on your business. When bosses promote workers above their competency, it can show up in ways both predictable and surprising.

For instance, you might notice that recently-promoted employees are suddenly less productive than before – or that they make more mistakes. Perhaps they spend too much time on menial tasks, or maybe they suffer from lower morale.

Over time, these issues can compound and grow. And if you continue promoting employees above their level of competency, you can fall victim to Peter’s Corollary.

Peter’s Corollary states that “in time, every position within an organization will be filled with someone who is not competent to perform the duties of that role.”

By promoting your employees above their level of competency, you’ve created an organization where nobody knows what they’re doing. And when nobody knows what they’re doing, it results in less productivity and more mistakes.

So how can you ward off the Peter Principle? How can you ensure your employees continue to perform well even after giving them well-deserved promotions?

Mitigating the Peter Principle in Your Workplace

The first thing you should understand is that the Peter Principle isn’t evidence of a hiring mistake. It doesn’t necessarily mean you promoted the wrong person to the wrong position, or that it was wrong to hire that person to begin with. Rather, the Peter Principle means the person chosen to fill a role is not currently prepared to perform their duties.

When it comes to mitigating the Peter Principle, there are two important strategies to take: Prevention and mitigation.

If you’ve already promoted someone who’s ill-suited for their new role, you can mitigate that error by giving your recent promotee leadership training and skills training to help them adjust to their new job.

Going forward, you can prevent the Peter Principle from impacting your workplace with a series of new initiatives.

First, you’ll want to implement a new leadership training program for recently-promoted employees. You’ll want to design this program to equip these employees for their new roles by focusing on their new duties and on managerial best practices.

Next, you’ll want to create employee mentorship programs whereby your high-performers can gain new skills and knowledge by observing others. Mentoring and nurturing employees is a great way to ensure they’re prepared for their new roles.

You can also create new rewards incentives for high-performers, like raises and bonuses, in lieu of promotions. These incentives could also be tangible rewards like hockey tickets or gift certificates for restaurants. When you can offer multiple performance rewards beyond just promotions, you’ll be able to promote only the people who are prepared for a new role.

You can create learning cohorts among employees who are up for promotions. This strategy can help your promotees lean on each other for support and help each other learn the job.

Create a New Promotion-Track Program

Finally, you’ll want to open up a number of non-managerial opportunities so that high performers can be promoted within their competency. When the typical promotion track involves promoting tactitians to managers, you’re often forcing your people into a role they aren’t prepared for and don’t have the skills to perform. While someone may be excellent at their current role, that doesn’t necessarily mean they have the temperament and personality needed for a managerial role. So if you can instead offer senior-level and specialist positions that are based on current employees’ skills, you can promote your high-performers without it negatively affecting the rest of your team.

The Peter Principle is a notable threat to productivity and revenue. Without careful monitoring, your organization could quickly find itself in a position of resource waste and incompetent management. But with the proper training programs and skills-based rewards initiatives, you can ensure the right people fill the right positions and keep your organization firing on all cylinders.

How is the Peter Principle affecting your business? What are you doing to give your leaders more skills training?

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Build a Workplace Culture and HR Policies That Support Trust, Inclusion and Fairness

Leave a Comment / Employee Onboarding / Mike

Workplace culture is a key driver of employee performance. A positive workplace culture can help your employees be more productive, more effective at teamwork, and more content at work. In contrast, a negative workplace culture could cause rifts and toxicity that undermine your organization from within.

In sum: Workplace culture matters. Your organizational culture has an effect on your ability to achieve your key goals. Unfortunately, too many organizations don’t monitor or plan their workplace culture. Instead, they view culture as extraneous to success or something that happens by accident.

Building an effective workplace culture that promotes peak performance requires deliberate planning and thought. It doesn’t happen on its own. If you want your team to perform at their peak, you’ll want to ensure your work culture and HR policies promote trust, inclusion, and fairness across your organization. Here’s what you need to know about the ROI of workplace culture – and how you can build a positive and productive culture in your organization.

Workplace Culture Drives Recruitment & Retention

Your organization’s culture is a key driver of both employee recruitment and employee retention. In addition to attracting new talent, a positive culture keeps current employees engaged. This means they’ll be more likely to stay rather than accept a new position somewhere else.

But organizational culture is more than just office perks. It’s more than just putting a foosball table in the break room. Jessica Kriegel, Ph.D., a workplace culture consultant, told Computer World earlier this year that creating a positive onboarding experience for new hires means treating onboarding like dating.

“You’re selling the culture of the organization,” Kriegel says. “It’s a sales opportunity to recruit someone to your company.”

Workplace culture, Kriegel explains, isn’t about feelings – it’s about beliefs. Kriegel says companies can deliberately engineer the beliefs they want employees to hold. The key, she says, is to design cultural experiences that lead to those beliefs.

“If we want people to be more innovative, they need to have the belief that leadership encourages risk-taking and embraces failure,” Kriegel explains.

It’s values and beliefs like these that create a strong workplace culture. If you want your company culture to create results then build it on values like trust, inclusion, and fairness.

The Importance of Trust, Inclusion, and Fairness

Trust is a key aspect of a successful culture. If your team doesn’t feel like you trust them to do their jobs, they’ll start to feel downtrodden and unmotivated. Without a sense of trust, your employees won’t want to show up to work. As a result, they’ll only put in the minimum effort.

Inclusion is also an important aspect of a positive workplace culture. When everyone on the team feels included, they become more effective at working together as a team. This means team-based projects will get done faster and to a higher degree of quality.

Fairness is potentially the most important value in your workplace. People have an innate sense of fairness that has been developed from a very young age. When your employees sense that they are being treated unfairly, it can cause significant rifts in your team. In some cases, unfair treatment may lead top employees to quit. In other, more egregious cases, it may lead to regulatory action or lawsuits.

It shouldn’t come as a surprise that having a strong, positive culture can improve your retention and recruitment. One study found that a culture focused on mutual support and achievement had retention benefits. In contrast, a workplace culture focused on power resulted in significant employee churn. Quite simply: Employees are more likely to stick around when they feel valued. And that means ensuring your workplace is a place of trust, inclusion, and fairness.

A Positive Workplace Culture Boosts Productivity

Beyond retention and recruitment, having a strong office culture renders benefits in other ways. Workplace culture is a significant factor in employee engagement, which influences productivity. When your employees feel engaged at work, they’re more productive – which means they perform better.

A positive company culture can also give employees a sense of ownership at work. When employees feel a sense of ownership, they’re more motivated and engaged.

Beyond simply higher morale, though, a strong company culture can also create a sense of accountability among your staff. This means they’ll be more committed to hitting their goals. One 2017 Gallup study found that engaged employees are 17% more productive than less-engaged employees.

Workplace Culture Starts from the Top

As a leader, you set your workplace culture. Whether you’re aware of it or not, the way you treat your employees influences the way they treat each other.

Your company HR policies also have a strong influence in creating your workplace culture. That’s why auditing your HR policies can help ensure you’re creating a productive and inclusive culture at your organization.

Once you’ve set those cultural policies, you’ll want to ensure that your new hires adopt them quickly. When onboarding and training new hires, ensure you have a module on your workplace culture. This way, new hires will know whether your culture is more high-pressure and hustle-oriented or more patient and relaxed. They’ll also know what your company’s values are and how they can embody those values in the workplace.

Technology can aid in this regard. With a corporate LMS, for instance, you can train your new employees on company culture before they enter the workplace. You can even create specialized modules that explain what trust, inclusion, and fairness look like at your organization.

Workplace culture is a key driver of employee performance; a positive culture also aids in recruitment and retention. Your organization will have some sort of culture, whether you plan it or not. That’s why it’s best to intentionally create a positive and welcoming culture where your employees can thrive. By building a culture of trust, inclusion, and fairness, you can boost productivity, improve employee retention, and give your new recruits a reason to feel excited to show up to work.

Are you training your team on workplace culture? How are you creating a company culture where your employees can thrive?

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What GEN Z Recruits Expect from Your Employee Onboarding

Leave a Comment / Employee Onboarding / Mike

Every generation brings with it new changes to the world of work. Long ago, the Lost Generation came of age during the Industrial Revolution and accelerated the transition from working by hand to working with machines. Later, the Baby Boomers ushered in the era of home computers, followed by the Millennials and the dawn of Web 2.0. Now, as Generation Z comes of age, further changes are at hand – and they’re set to once again redefine the world of work.

Generation Z isn’t just more tech-savvy than previous generations – they have their own unique priorities and values that they’re bringing into the workplace. They have their own expectations around the world of work and the process of getting a job that employers must cater to in order to stay competitive with new hires.

Here are some of the reasons why onboarding your Generation Z employees should be as easy as signing up for Netflix – and a few ways you can create a seamless onboarding experience your Gen Z hires will love.

Generation Z Has a Unique Attitude Toward Work

Generation Z is unlike any generation to have come before it. In the past, previous generations preferred standard 9-5 office hours. They preferred meeting with managers face-to-face, and they enjoyed doing less technical work.

But today’s young people are disillusioned with the traditional world of work. They have ambition, yes; however, their ambition doesn’t necessarily align with the concept of climbing the traditional corporate ladder. After seeing multiple recessions and a pandemic in their short lives, Gen Z is now seeking a greater life purpose. They want to be in roles that enable personal and professional growth. They eschew low-level work like unpaid internships. And in many cases, they’re quitting jobs without having second jobs lined up.

“You have permission to quit a job that makes you miserable,” one Gen Z TikToker recently said.

These younger workers have developed a reputation for job-hopping to get the best deal, but the reality is deeper than simply looking for a low-effort, high-pay gravy job. A 2019 survey of Generation Z members by Kronos Inc. found that 30% of Gen Z view themselves as the hardest-working generation.

These workers may sound entitled, but they entered the workforce during a recession and a pandemic when they witnessed many of their peers and elders being laid off. Gen Z works hard, but they also have certain standards in the workplace. They won’t tolerate rigid schedules, poor work conditions, or bad managers. As many as 21% of them say they don’t want a manager at all.

In essence, Gen Z wants flexibility at work and opportunities for personal growth. They want to work for ethical companies who give them respect, recognition, and flexibility. They value authenticity and personalization. And they’re willing to switch jobs to find these traits in an employer.

Leverage Technology to Boost Engagement

Gen Z doesn’t just want employers to use technology when onboarding – they expect employers to be tech-savvy. Embracing new technology in your onboarding process can show your potential hires that you’re flexible and modern, which can result in a more engaged and motivated hire.

Emerging new technologies also render other benefits to the employer apart from making recruitment easier. New tech tools can enable your employees to be more productive and independent with less manager interaction and less time spent in the manager’s office.

With an online LMS, for instance, your hires can walk themselves through training exercises on a flexible schedule without the need for one-on-one interaction or manager hand-holding.

An LMS is also a great way to give your Gen Z hires the professional development opportunities they crave. Gen Z employees strongly prefer having jobs that enable them to grow their skills, and they’re willing to leave companies if they don’t feel included. By embracing Gen Z’s ambition, you can help them find a home at your organization and perhaps convince them to stick around for the long haul.

Onboarding & ProDev Set the Tone

If you want to hire and retain good Gen Z workers, you’ll want to invest in your employee onboarding and professional development processes. It’s significantly more expensive to hire a new employee than it is to retain an existing one; the right changes to your processes can give your Gen Z employees a reason to stick around. Gen Z isn’t necessarily loyal to a single employer – they see a job as a means to an end. The onboarding process is your opportunity as an employer to change how your Gen Z employees view you. It’s your opportunity to convince them to stick around.

Gen Z expects onboarding and professional development to be simple and straightforward. They expect a personalized experience that they can walk through on their own, at their own pace. They expect onboarding to be as easy as signing up for Netflix. The more you can do to give them that kind of experience, the more successful you’ll be at retaining them and making the most of their skills and ambition.

Gen Z workers aren’t some mysterious enigma. They have predictable and easy-to-understand priorities and preferences rooted in a particular worldview of work. They’re very different from previous generations in the manner in which they view work, yes. But once you understand their priorities, it’s easy to retain and motivate them.

What is your organization doing to boost engagement with your Gen Z employees? How are you making your workplace more socially conscious, tech-savvy, or flexible? How are you creating meaning for your employees?

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Worker Productivity is Falling Sharply and CEOs Don’t Know Why

What Might Be Behind the Worker Productivity Slump?

Different companies may define worker productivity in different ways, but generally, worker productivity is defined as a worker’s hourly output.

While CEOs have said they don’t know why worker productivity has fallen, there are some other coincidental workforce trends that might explain reduced productivity. Real wage growth stagnated in 2021 and shrank in 2022, indicating that across the globe and in North America in particular, wages have not kept up with inflation.

The International Labour Organization’s 2022 Global Wage Report states that in North America, real wage growth was zero in 2021. In 2022, meanwhile, most North American workers saw a real wage loss of 3.2 percent.

This real wage loss occurred as a result of not decreasing wages, but historically high inflation. In Canada, the annualized inflation rate was 6.8% in November 2022; this stands in contrast with the Bank of Canada’s target inflation range of 1% to 3%.

In other words, inflation has taken such a large bite out of wage increases that most employees are taking home less money in 2022 than they were two years prior, despite earning higher salaries.

According to the Kellogg School of Management at Northwestern University, higher wages are associated with higher productivity. So when employees’ inflation-adjusted wages fall, they’re less motivated and therefore less productive.

Better Engagement, More Training Can Mitigate Worker Productivity Losses

With higher wages being associated with higher productivity, it only makes sense to dole out cost-of-living raises. But in addition to cost-of-living raises, employers can advertise financial incentives for employees who complete additional training, achieve certain targets, or show some sort of initiative. When employees can see that their contributions are valued, they become more engaged and more productive as a result.

But increasing employee compensation is just one of several ways that companies can boost productivity; other measures can help to increase output without adding to payroll costs. For instance, there are several types of training that can increase employee productivity.

Time Management Training and Skill Cross-Training Can Help

One of the simplest kinds of training to give your team is time management training. If productivity is poor because your team isn’t managing their time well, teaching them how to better manage their time while at work can be an effective means of boosting productivity. For instance, you may want to teach your employees the Pomodoro Technique or various energy management strategies. Teach your team to tackle easier tasks when they’re low on energy and harder tasks when they’re alert and motivated.

You’ll also want to ensure your employees aren’t overworking. Burnout is a key cause of low productivity; if your team is spending more time than needed on non-critical tasks or taking on too much work, they could be burning themselves out. Check in with your employees regarding their workloads to get a sense of whether they’re taking on too much.

Or maybe your team isn’t as productive as you want them to be because they lack certain competencies. If your team is composed of specialists who are experts in their roles, that means they probably aren’t well-equipped to cover for each other when needed – for instance, when someone is out sick or on vacation. Cross-training can help your employees to learn each other’s roles, so they can step in and perform each other’s work as needed.

When cross-training your team, you’ll want to ensure you’re optimizing the division of labour and knowledge management – make sure you understand who needs to know what and who needs to take on which tasks.
You can also use dataanalytics tools to track worker productivity and identify patterns. For instance, if productivity seems to slump immediately after lunch, you can ask your employees to prioritize important work in the morning and focus on non-critical tasks in the first hour or so after their lunch break.

Ask your team why they think productivity isn’t where it should be. Ask your team what challenges they’re facing and how you can give them the tools they need to perform. Then give them the personalized training they need to solve those challenges.

Emerging Technologies Can Boost Worker Productivity

Investing in new technology can be an effective method of increasing your team’s productivity. Emerging tools and strategies like artificial intelligence and gamification are making it easier to help teams boost output.

For example, you might consider switching to a corporate LMS that uses content personalization and a gamified progress tracker to motivate your employees to finish their training. An LMS can also help with knowledge management, so you can ensure all of your employees have the knowledge and training needed to get the job done. Or, you could use any number of AI-enabled corporate tools that can help your employees file paperwork faster or better organize their workdays.

It’s also important to use technology that can monitor goal progress. When you have instant insight into your team’s progress, it’s easier to spot problems and remind employees of incomplete tasks. Your team can also manage their time better when they have a clear view of their goals.

Worker productivity has started falling for the first time in 40 years. In contrast to the previous productivity slump, today, managers have access to a wide array of tech tools. These tools can help them to keep a closer eye on productivity and better manage and motivate their teams.

The employee productivity slump is at least partially tied to high inflation and real wage loss. However, doling out raises is only one of many solutions that team managers can use to boost productivity. New technology, better employee engagement, and investments in corporate training initiatives can all increase productivity. These initiatives can help to justify cost-of-living raises and further motivate your team.

What are you doing to boost your company’s productivity? How are you keeping your team engaged and motivated?

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Employee Retention: How to Keep Your Top Performers and Fend Off the Great Resignation

Leave a Comment / Employee Retention / Mike

The hiring crunch has been going on for quite some time. Across all industries, at every level, there are more open jobs than there are qualified candidates to fill them. In parallel, people are leaving their jobs in record numbers. In November 2021, the United States’ resignation rate reached a 20-year high. One Pew Research survey examined the top reasons that employees resign. The survey found that most employees leave due to low pay, feeling disrespected, and/or no opportunities for advancement. Other reasons for leaving included: a lack of childcare, no scheduling flexibility, and poor (or no) job benefits. The Great Resignation is primarily being driven by young people, particularly those under age 30. With more employees than ever deciding that it’s time to move on, focusing on employee retention has never mattered more.

Employee Retention Challenges: What’s Driving the Great Resignation?

Economists say the leading cause of the Great Resignation is the pandemic. The COVID-19 pandemic has caused employees to rethink their life priorities. The things employees previously sought (and/or tolerated) in a workplace are no longer the same things they seek out today. But this priority shift isn’t just employees’ concern. Managers have much at stake in the Great Resignation as well. Research has repeatedly found that it can cost at least ⅓ of an employee’s salary to replace that employee. For high-level positions, replacing a lost staff member can easily cost 4 times their annual salary.

If your organization is having trouble hanging onto your employees, you’re looking at lost time and money. Furthermore, your understaffed crew is likely experiencing low morale as they try to pick up the slack. That’s why improving employee retention is one of the best things you can do for employee morale and your bottom line. Here are some things you can do to boost your retention rate and cut down on turnover costs.

Give Your Managers Ongoing Training to Increase Employee Retention

It’s often said that people don’t quit jobs; they quit bosses. While a good manager can win employees’ respect and loyalty, a bad manager can drive away even dedicated staff. That’s why training your managers is one of the best things you can do to ensure your staff stay with you long-term.

Managing people is its own skill-set with its own learning curve. While some people are naturally gifted at team management, others are not. Even if managers have degrees in management or business, their post-secondary education won’t necessarily transfer over to your workplace. Investing in managerial training with focus on motivational tactics and leadership styles can help you to cultivate leaders within your organization that your team likes and respects. That means training your managers will go a long way toward keeping your whole team for the long-term.

Provide Opportunities for Career Advancement & Watch Your Employee Retention Rate Soar

Employees don’t just want opportunities for career advancement – they want to see the path to advancement and understand what it entails. Show your top performers that good work is rewarded, and they’ll feel more invested in your organization.

Hiring from within is also faster and far more affordable than external hiring. When hiring externally, you’ll likely need to pay for a recruiter and training time. You’ll also need to give your new hire time to become acclimated to their new environment. But when you can hire internally, you save the time and money involved in recruitment and training.

It’s also much easier to cultivate and reward your up-and-coming intrapreneurs if you have a training tool that tracks their progress. Your organization likely has intrapreneurs – employees with entrepreneur-like motivation and creativity – working on innovative ideas for your company. If your managers aren’t paying attention, it’s easy to miss these high-performers – and under-utilize them.

But when you can track your employees’ training, you can easily spot the top performers. You can identify the ultra-motivated people who are succeeding at their training and even taking the initiative to train themselves in areas outside their job requirements. With a tool like Cogcentric, for instance, you can instantly identify who’s taking on extra training — so you know who your high-performers are.

Cultivate a Retention-Oriented Workplace Culture

One of the top reasons why employees leave is toxic workplace culture. In January 2022, a team of researchers from Revelio Labs, CultureX, the New York University School of Business, and the MIT Sloan School of Management performed an in-depth analysis of over 34 million online employee profiles, aiming to uncover the top reasons why employees leave their employers. The researchers also created an index called the Culture 500, a list of 500 large private-sector employers across the United States that collectively employ 25% of the American workforce. This study examined the resignation rates across companies and industries, assessing which industries and organizations were most likely to see employees quit.

The findings were complex, but they tell a story about workplace culture. While some industries, like fashion retailers and management consultancies, were most likely to lose employees, there was also significant variation within industries. Within the airline industry, for instance, employees were nearly twice as likely to leave JetBlue as to resign from Southwest Airlines.

Next, the researchers analyzed 1.4 million Glassdoor reviews of the 500 employers, identifying which topics mentioned in reviews were most predictive of a high resignation rate. Surprisingly, pay rate ranked #16 on the list of most-mentioned topics. In other words: Pay rate wasn’t top-of-mind for employees who resigned.

In contrast, the study found that toxic workplace culture is the #1 most common reason for and strongest predictor of employee resignation. Toxic workplace culture is the driving force behind 10 times more resignations than pay; that means no amount of compensation can convince employees to stay in a toxic work environment.

In a follow-up article, the researchers describe the 5 attributes of workplace culture that are the most toxic to an organization. Notably, all of these attributes are things that are within a manager’s control.

Workplace Culture is a Choice

Workplace culture isn’t something that happens by accident; it’s a byproduct of your organization’s leadership. Every manager in your company plays a role in setting your organizational culture. By training your managers and senior staff to counteract these toxic attributes and instead cultivate a positive workplace culture, your organization can improve its retention rate – thereby cutting your hiring costs.

The Great Resignation has employees at all levels questioning their priorities and leaving positions that no longer appeal to them. As employees quit, employers are facing higher recruitment costs driven by high inflation and high staff turnover. With employee recruitment costs easily eclipsing the cost of retention, it’s never been more important to hold onto your staff. You can boost your retention efforts with a mix of managerial training, opportunities for advancement, and a positive workplace culture.

What is your company doing to boost employee retention? How are you equipping your employees to succeed in their roles and enticing them to stay with you?

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