As you review your organization’s bench strength, the bottom of the bell curve is bugging you. A small percentage of employees just aren’t cutting it. Once upon a time, most of them were highly rated and, as a result, they’re sitting in big jobs. But you’re losing confidence in them, and they’re losing confidence in themselves. They’re becoming defensive or going underground.

It’s natural to blame them. After all, their performance is affecting yours, and their previous contributions are fading in light of current challenges. Many organizations practice an extreme form of the "blame the employee" game by using an up-or-out approach to management development. In the up-or-out process (typically done once a year as part of organizational planning), managers are asked to chart out their organizational needs for the future, assess their staff’s current capabilities, and identify the top and bottom 10 percent that should move "up" or move "out." As a result of this process, people get promoted, reassigned, hired and "managed out" (read: fired without an ensuing lawsuit).

In so-called high-performance organizations, executives follow this process dutifully, with the understanding that their ability to manage out that bottom 10 percent is part of their job, albeit an unpleasant one. This ongoing "Survivor: The Organization" game results in a corporate "kill or be killed" mentality. The up-or-out process provides an easy road for managers who would rather focus on the low-hanging fruit of structure and talent assessment and defer more difficult decisions regarding strategy and career development. In many organizations, organizational planning has been reduced to endless hours spent tinkering with org charts (in the vain hope that some sort of a sudoku-type answer will emerge) and gossiping about others’ capabilities and potential (albeit in an organizationally sanctioned manner).

Why Up-or-Out Doesn’t Work

Up-or-out is a ruthless, Darwinian approach that, very often, simply doesn’t work because it ignores two key realities. First, it assumes that if there is a performance issue it’s due to the shortcomings of the individual. In my experience, most individual performance issues are really management performance issues in disguise. Second, up-or-out assumes that the devil you don’t know is better than the devil you do. In reality, hiring someone from the outside is difficult, expensive and typically results in trading one set of problems for another.

Try, instead, to entertain the idea that you have most of the right people right now, and spend your time assigning them to roles that they 1. want to do, 2. know how to do, and 3. in which they know what to do. You can do this by: