A Practical Guide to Help Companies Keep Their Top Performers

Stop. Take a look around your office. Put on your judge’s robe and see if you can’t classify every single person into one of these three categories:

1. People who make things better

Few in number, these are the people in your company who have vision. They take what exists and improve it based on their ideas, talents, work ethic and determination.

2. People who keep things movin’

The bulk of your workforce, these people are dependable, positive contributors to the company. They develop solid plans to help the business meet goals or contribute to the successful execution of others’ plans.

3. People who make things worse

Similar in number to our first group, where they differ is that they occupy a disproportionate amount of time for those trying to move things forward. 1’s and 2’s often have to fix their mistakes or coach them repeatedly on how to fix their mistakes. They offer little in the way of new ideas and hinder implementation — actively or passively — of projects designed to move the company forward.

Let’s be clear: 1’s, 2’s and 3’s exist on every level of the company. 1’s aren’t necessarily your managers or executives, and 3’s aren’t necessarily your rank-and-file or less-skilled employees. I have worked with far too many 3 executives and been blessed to toil alongside a bunch of rank-and-file 1’s who made a difference.

Beyond that, your place in any group is not set when you get there. In my last stop, I was a 1 in my first year and, for a variety of truly interesting reasons, became a 3 (or, at best, a low 2) in my second. Ultimately, your movement in and out of these groups is your responsibilities, but there are outside factors that can play a part.

It’s important for a company and for department leaders to go through this exercise of putting the individuals on their roster into one of these three groups every six months or so, and certainly not less frequent than annually.

Unfortunately, some companies take this philosophy way too far and force people into groups based on pre-determined percentages, saying that a certain number of employees have to be a 1, a 2 or a 3 and following it up with, “The 3’s get fired.” That goes beyond silly into the land of the stupid. Every manager’s goal should be to hire a team of 1’s and to accept nothing less than a healthy mix of 1’s and 2’s at any given point during the year.

But this is about more than performance appraisals. It’s about what you as a leader are going to do with your most scarce resource and how your company should allocate its own most scarce resource.

Photo by Aphiwat chuangchoem on Pexels.com

Your Most Scarce Resource: Time

Please let’s not got into how leaders are sooooo busy. Effective leaders aren’t the ones who work 80-hour weeks. I have met plenty of great leaders who have a solid work/life balance and put in 40, 45, maybe 50 hours a week. It’s possible, and it needs to be emphasized for the overall health of leaders and the organization.

That said, however much time you’re willing to commit to the endeavors of your company is finite. Effective leaders divide that time up wisely. A system that identifies which employees make things better, which employees help keep things movin’ and which employees make things worse helps time management.

Leading 3’s: Don’t fall into the void

It’s obvious that the 3’s deserve the least of your time. Yes, 3’s should be given the opportunity to move up and out of that group, but that shouldn’t come at the expense of the other two groups. If you’re rubbing your headachy forehead because you’ve got to do another performance management meeting with a 3, you’re doing it wrong. Good performance management is a simple four-step process applicable to just about any individual, and it’s not a time-suck:

  1. Politely and professionally accentuate the areas that need improvement (while also accentuating the things they do well and can build upon. Everyone has something worth mentioning here).
  2. Work with them to develop a goal-oriented, agreed-upon improvement plan.
  3. Identify the available resources to help them meet the goals of that plan.
  4. Set them loose to sink or swim.

3’s with the potential to be 2’s or 1’s do not need more than one of these meetings in the course of a year — or the course of their career — to “get it.” But even 1’s sometimes veer off-course for a bit. And in reality, a 3’s problem might not be his lack of ability or her bad attitude. It might be you or the company. Either way, it’s best to quickly figure this out and for things to either improve or for both sides to go their own way.

Bottom line: Limit the amount of time you spend with 3’s. Not only can they be time-suckers, they also have a tendency to leave good leaders in bad moods. No, it shouldn’t be that way, but it happens to the best. Don’t spend so much time that you’re letting 3’s put you in a bad place for your other two groups.

Leading 2’s: Find your potential 1’s and work with them

The error would be thinking that the 1’s should get the most of your time. The reality is, most 1’s don’t want the most of your time — and they certainly don’t need it. In fact, great 1’s are often stifled by overbearing leadership that doesn’t recognize they just need to be free to do what they do.

More on 1’s in a minute.

The people to whom you should give the most of your most scarce resource are the 2’s. More specifically, your job is to identify the handful of people in the 2 group who have the potential to become 1’s with your support and encouragement.

So many good 2’s with the potential to be great 1’s end up leaving companies because management doesn’t recognize their potential and help them reach it. In fact, some 1’s become 2’s in practice when the company doesn’t do what’s right to honor their contributions. More on that in a moment, too.

Your success as a leader may ultimately come down to your ability to elevate 2’s and help them reach their potential. It certainly is something you can point out when you’re touting your own success story.

How can you identify 2’s with breakout potential? Look for the leaders without titles.



Notice the folks who step up in various situations to handle things when managers or 1’s are not available. Again, this isn’t simply about being willing to work long hours. Often, the folks who put in the most hours aren’t good but rather are insecure and seek to make up for a lack of ability with time. Rather, this is about people who do more without having to work longer hours or being told to do it.

Find them. Nurture them.

Leading 1’s: Be the fullback

Leading a 1 is easy, fun and rewarding, for the most part. It can get prickly at times if the 1 lets her 1 status go to her head. We all need a little ego check from time-to-time. Provide that check judiciously and tactfully.

But outside of that, as a leader, let them do their thing and move the company forward while you share in the glory that comes their way. Your job is to be their fullback.

(Not a sports fan? Watch this to understand the reference: )

Clear the way for them to run. Keep office politics away from them. Make sure they don’t step on any hidden landmines. Give them what they need to excel. Cheer them on. Recognize their contributions. Fight for them and advocate them.

Which leads us to…

Your Company’s Most Scarce Resource: Money

Your company is not like you. While your most scarce resource is time, your company theoretically has unlimited time. Yes, a day has 24 hours for you and your company. But there’s only one you. If your company needs to devote more time to the operation, it can add people. Each person adds another eight hours (or more) to the company’s day.

But to add people, the company needs money. And no company can print money.

There are two ways companies can use its most scarce resource in pursuit of a better workforce. Unfortunately, many companies tend to ignore one. Worse, many are not good with how they administer the one they do remember.

1. Raises and bonuses

For the love of God, would good leaders please start using the system that exists to reward their 1’s? I fully understand that many companies allocate a fixed amount once a year to be spread across the employee base. Companies that don’t give leaders great flexibility with how they divide up the amount given to their departments are doing it wrong. Further, it is 100 percent not acceptable for leaders to shrug their shoulders and say, “That’s just how things are around here.”

Companies and leaders who are bad at rewarding 1’s with raises and bonuses lose those 1’s to companies that aren’t. Yes, it’s a nice theory to think stimulating work and kind words will keep good 1’s where they are. In truth, it might for a little while. But at the end of the day, stimulating work and kind words don’t help families pay bills and fund the things 1’s with good work/life balance want to do with their most scarce resource — free time.

So please… please … pay them. And don’t make them have to fight for it. Don’t make them have to make the case to you at the end of the year why they are 1’s and why they deserve more than the 3 percent the company has allocated. Nothing… nothing is as dispiriting to 1’s than to do what they do so well and then be lumped in with the others who don’t do what they do.

Again, let’s go back to who 1’s are:


1. People who make things better

Few in number, these are the people in your company who have vision. They take what exists and improve it based on their ideas, talents, work ethic and determination.


These are the folks who not only are bringing new successes to the company, they are making your life as a leader easier! Because of them, you have less worry and fewer things to do. If your friend did that for you, you’d take them out to dinner once in awhile, right?

Wise leaders of 1’s pre-emptively say, “Hey. I got your back. When raise time comes, I’m going to fight to get you XXXXX.” And then fight to get a commitment to get that X in place immediately! Many a manager has been left searching for a replacement for a 1 before raise time came around because they didn’t show their commitment to their top performers with actions, and not just words.

Also, if you’re a company with a multibillion dollar budget, how hard is it to find a little cash to reward your 1’s for showing exceptional initiative and performance? Why are you waiting around for the end of the year to spread some of the wealth they are bringing in at that very moment? Again, “That’s not the way we do things around here” is not an acceptable answer. Remember your role with 1’s: You’re the fullback. Clear the way through “That’s not the way we do things around here” and do things the right way instead.

What about 2’s and 3’s?

Let’s talk about 3’s first. It is disturbing how many 3’s get raises when the end of the year comes, second only to the number of 3’s who think they deserve a raise when the end of the year comes. If you’re not in a union shop where salary increases are mandatory if you’re breathing at the end of the year, why exactly are you rewarding people who are making things worse?

“Well, they’ve got a family. The least I can do is give them 1 or 2 percent.”

Great. And you’ve just done that at the expense of those who help keep your business going and those who actually make it better.

Listen, I get compassion. I would contend, however, that it is compassionate to help motivate people to search for a different job with another company that is a better match for their skillsets. No, I don’t think any leader should have a quick trigger finger when it comes to firing people. So a calm, rational explanation to an employee of why he is not going to receive a raise for the work done in the previous year is a good tool to send the proper message that the clock is ticking. I don’t care if you then give that person three months, six months, a year, two years to improve. That’s another matter entirely. What I do care about is that these 3’s are not a drain on the funds with which you can reward the 1’s and 2’s.

Speaking of those 2’s, not all 2’s are created equal. To reward all 2’s with the exact allocated percentage of a raise is wrong. You’ve taken the time to identify your potential 1’s. Tell them and show them! Let them know that, while the company average is a 3 percent raise, you’re giving them a 4 percent raise because, in the past year, they’ve shown greater abilities and the potential to bust through toward better things.

Talk about motivation! It’s the exact opposite of a good 2 being lumped in with all the other 2’s and told, “You’ve had a good year, but, in the end, you’re rated a 2 so …” You as a leader need to be better than that.

2. Equipment, Training and Travel

On top of not proactively rewarding 1’s and taking care of 2’s, many companies take an egalitarian approach when it comes to equipment, training and travel. This is a mistake.

Again, the key thing here is identifying your potential 1’s. Then, give them the stuff they need to fulfill their potential. Whether that’s a week at a great training program for future leaders or a new piece of technology that helps them be more efficient, pro-actively lead the charge to help them along. Sometimes all that separates a 2 from a 1 who brings in large amounts of revenue for your company is some new learning from a $1,000 seminar. Make the investment.

In addition, say “yes,” when your 1’s ask for things. Don’t make them write up justifications for the expense. If you’ve got a good 1, they know what they need to stay there. Be the fullback and help make it happen, even if you might not think the conference in, say, San Antonio is any better than the cheaper one in Toledo. No matter what, the one in San Antonio is better for your 1’s. Make it happen for them.

And if that means a 3 doesn’t get to go to a seminar that year or that her request for a new widget is delayed, so be it. Yes, you have to make sure you’re giving them what they need if they’re attempting to meet the goals set up to get them out of the 3 group, but just like with raises, don’t reward people who make things worse. Use those funds for the members of the other two groups.

Practice Right Now

So now that we’ve gone through all of this together, let’s return to the beginning. Stop. Take a look around your office or, if you’re virtual, think about the people who make up your company. Put on your judge’s robe and see if you can’t classify every single person into one of these three categories.

  1. People who make things better.
  2. People who keep things movin’.
  3. People who make things worse.

Even if you’re not a leader or manager right now, practice doing this. Should you ever find yourself in a role where you have an influence over the lives of other human beings, it’s a great system to help guide you in how you manage your most scarce resource — and your company’s.

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