FOR centuries people have bred animals to make them produce better meat, more wool or resist disease. Animals have been crossbred to improve the strain and the bad ones culled to leave the best of the breed.

Now, it seems, companies are showing interest in doing this with their staff. Microsoft and GE are two American giants that make no secret of their willingness to cull staff and recruit afresh each year. Many other companies do it without making a fuss.

When Hudson, the international human-resources and recruitment specialist, decided to research the subject to see how many other firms would like to have an annual cull, it found that many were keen. But they wanted to know whether other firms were thinking of doing it or whether they would find themselves out on a limb.

After talking to more than 500 executives, Hudson found that the majority believed that a fixed quota for annual staff dismissal would boost financial performance and productivity. But only 4% would do anything to implement it. They thought there was a shortage of talent and they would be better to retain average or below-average performers than go without.

Many argue that companies could make a substantial staff cull without affecting morale. Firms overestimate the damage that a clear-out of weak employees will have on the rest of the workforce, claims one company that believes employers could dismiss up to 20% of their workforce each year without damaging productivity or morale. Almost half agree that dismissing up to 5% of staff is healthy.

“There is a dichotomy,” said Andrew McNelis, chief commercial officer at Hudson. “There is a fear of putting up with inadequacy, but should companies accept an unsatisfactory workforce? Really good staff get upset if they are not working for a meritocracy.

“There is a difference between people who were not up to the job from the start and people who are capable but just won’t apply themselves. This is one of the reasons why firms will increasingly have to look at this and its impact on the good people. Most large organisations would use competency people to make hiring decisions. Four out of five of our clients do.”

The motive for culling staff is not simply to save money but rather to maintain staff morale. “People certainly get upset with those who are capable but don’t make an effort,” said McNelis. “The vast majority of people who turn up really want to do a good job, which is why, when we commissioned the research, we wanted to know whether it was going to be a trend or it was a fad.

“Over 70% of the executives said they had not introduced the practice of culling because they didn’t want to create a climate of fear among their staff. You need a performance-management system to give feedback to staff. Then there can be remedial action and you can turn underperforming employees round. The classic example is someone who has been very good but goes off the boil. A good performance-management system will help with a turnround.”

McNelis said that Hudson’s experience is that the biggest reason for recruits leaving is a cultural mismatch. Companies should make sure candidates for jobs meet three criteria:

- Can they do the job?

- Will they do the job with the right attitude — for example, coming into the office after a transatlantic flight?

- Will they fit the culture?

The executives who were questioned had mixed views about improving performance. Half of them believed that training was vital but the other half felt more training was just a sticking plaster to cover up poor hiring in the first place and would make no difference.

McNelis believed performance could be improved. But it depends on having a good performance-management system in place.

Spot the best and develop them

- Identify the skills needed and the values of your organisation.

- During recruitment, compare candidates’ capabilities against the long-term needs and objectives of the organisation. Ensure all those involved in recruitment are aware of these terms.

- Assess all your staff regularly and check that their skills and attitudes match the organisation’s needs.

- Offer coaching to address specific needs. Nearly a third of organisations do not have training and development programmes for their staff.

- Engage employees to help facilitate good, if not excellent, performance. Provide strong development plans, good pay and a fun working environment.

- Be honest — there is no point in pretending everyone is right in terms of their skills, attitude and cultural fit. Create targets and timeframes in which underperformers must improve and stick to them.

- Don’t cover up. If you dismiss any employee, be open and honest about the fact with the rest of your staff.

- Establish your dismissal figure for the year. Then use good recruitment and talent management practices to reduce this in the following year.

- Identify the future lifeblood of the organisation. Work out how your high performers can be developed and how long their career progression path will be.

- Continually assess whether you have the right people and invest in their development.

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