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Low performers may think their workplace is great – because few demands are made of them.

What if your top performers were not your most engaged employees or were frustrated and considering bolting from your organization, in part because you were letting low performers slough off?

What if your lowest performers were your most engaged employees – so engaged, in fact, that they were recruiting their friends to come on board, perhaps talking up your company because it is, to their minds, a fairly undemanding workplace?

This sounds like a disastrous situation, but luckily it's not your workplace, right? Your top performers are highly engaged, right?

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Think again. There's a good chance the disastrous scenario fits your workplace but you are simply unaware of the true situation.

That's the finding of some fascinating research by Mark Murphy's team at Leadership IQ, a consulting firm based in Washington, D.C.

It started when he was working with a technology company and had access to both employee engagement levels from research studies done there by his firm, and the company's performance appraisals. He decided to correlate them and, to his shock, found that the most engaged employees were not the high performers, as expected, but the low performers.

The analysis was then extended to 207 companies, using the same type of data. In 42 per cent of them, Mr. Murphy's team found that the most engaged employees were the low performers.

In 35 per cent, the high performers were more significantly engaged, while in the remaining 23 per cent high and low performers were roughly equal in engagement. So the most prevalent situation was the alarming state where the most engaged workers were the low performers.

"This is a wake-up call," Mr. Murphy said in an interview.

"If high performers deliver better results, we should engage that asset." When he did a detailed analysis of the original tech company, which he calls Tech X, he discovered that:

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Low performers feel motivated

On employee engagement surveys, Mr. Murphy's team found that workers who were deemed to be low performers in their annual review scored higher than high-performer colleagues when asked to rate the statement: "I am motivated to give 100 per cent effort at work."

This means that at Tech X – as in many organizations, Mr. Murphy stresses – high and middle performers are not reaching their full potential. He worries that in too many workplaces, it's not clear what is high performance or low performance, and that managers avoid holding the necessary challenging conversations with low performers, while failing to give sufficient recognition to top performers.

Low performers think their workplace is great

"The problems here are multiple," the research study notes. "First, we have low performers so comfortable in their status quo that they aren't afraid to say 'Well, I don't do much around here, but it sure is a great place to work.' As for the middle and high performers, their low enthusiasm can lead to weak client and customer relations. And it certainly doesn't predict success for recruiting efforts or building a talent pool of good and great performers. To help high and middle performers reach their full potential, if your best people aren't shouting from the rooftops 'This is a great place to work,' you should be investigating why."

Treatment of low performers has ripple effect

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When low performers are not held accountable for poor performance, it has a negative impact on high and middle performers. While the low performers aren't being pushed to produce, the high performers – who are working their tails off – seethe. "High performers like the notion of a meritocracy," he said.

High performers are overlooked

The efforts of high performers go largely unrecognized while low performers receive positive reinforcement. Mr. Murphy notes that acceptable behaviour is anything we accept – and at Tech X, low performance is acceptable, indeed reinforced with supportive comments. Meanwhile, managers ignore high performers. That should be reversed: Managers must provide negative feedback to low performers and reward top performance with praise.

High performers feel helpless about their careers

Mr. Murphy believes this is the most dispiriting finding. As a result of Tech X's actions or inactions, high performers feel helpless about their career prospects. "We're undermining the high performers' belief they can control their fate," he said. "By not recognizing their work we are saying, 'You can do great work but that may not make you successful in this organization.'"

Low performers don't know they deserve that label

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At Tech X, performance standards are not clear enough for low performers to know they are below par. Mr. Murphy said that is because performance standards are often obtuse (beyond jobs such as sales, for which there are clear targets). And that hurts not only because of the low performance, but because another Leadership IQ study of more than 70,000 employees found that 87 per cent said working with a low performer made them want to change jobs and 93 per cent said working with low performers decreased their productivity.

The takeaway: Assume your company is in the same boat as Tech X. Mr. Murphy suggests you begin comparing employee engagement scores to performance, and change your management approach if necessary.

Special to The Globe and Mail

Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter

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