In my last post I described a study, identified in the wonderful New York Times Magazine issue- “The 9th Annual Year in Ideas” ( http://www.nytimes.com/projects/magazine/ideas/2009/ ), which sought to quantify the value brought to an organization by its “Senior” workers (those over age 50) and the proper mix of older and younger workers that would maximize the effectiveness its workforce.
The second relevant study cited in this year’s issue was one by a trio of Italian scientists including Andrea Rapisarda from the University of Catania, Italy, published in the Journal Physics A. This study sought to understand how companies could best mitigate the “Peter Principal”, a classic theory of workplace incompetence developed by Canadian psychologist Lawrence J. Peter. The principal states that people in a workplace will be promoted until such a point that they reach their level of incompetence, and then will stay there, indefinitely, gumming up the works in perpetuity.
Rapisarda and her team created a computer model of a theoretical 160 person company and simulated a variety of promotional strategies to try to determine which one would lead to the most efficient organization. Surprisingly, the least effective method turned out to be promotion people based on merit, a strategy that was less effective than promoting people randomly or even promoting a mix of the highest and lowest performing employees. The researches explain that the findings can be explained by the game theory principal of “Pandora’s Paradox”, in which participants “win by alternating between two losing strategies”.
Yikes. So where does this leave HR in determining the right strategy for promoting workers and maximizing the impact of the workforce on the overall productivity of the company? What kind of fairness and morale issues does an organization face if it is handing out promotions based not on merit but by bingo parlor style lottery? Fortunately, there’s a silver lining here. Namely, Rapisarda’s model assumed that the likelihood of someone promoted into a new job being good at that job was random. Some people promoted would do well, others would quickly find themselves over their skis, as it were. If you can, on the other hand, identify who will do the best in the next job and promote that person, that’s the best strategy of all.
The key, then, is for an organization to better refine its employee profiling capabilities, to best understand not who are the highest performing employees in their current jobs, but, instead, who will be the highest performing employees in their next jobs. By collecting detailed data on the employees it has promoted in the past and comparing those who have succeeded in their new roles to those who have not, organizations can glean insights to help them better manage (and motivate) their workers. I once had a boss who told me that when he interviewed job applicants he did so not with an eye towards whether they could do the job they were interviewing for, but instead the next job they might take after that. It would clearly behoove smart companies to take the same approach.
Tags: aging workforce, Promotions, The 2009 Annual Year in Ideas, Workforce Mobility