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Terri Kabachnick is the founder of The Kabachnick Group (TKG) a company focused on teaching service-oriented businesses how to develop customer loyalty through employees.

The research conducted for her book, “I Quit But Forgot to Tell You,” (www.Amazon.com) states that up to 65 percent of all employees are disengaged. This figure is based on surveying, interviewing, assessing, analyzing and studying more than 44 organizations with more than 6,500 employees at every level. What was revealed through the research was a much deeper level of understanding of not just who among the employee population was disengaged but why the employee was disengaged.

Perhaps you know someone who has resigned from their job but didn’t bother to turn in their formal resignation or give notice. They still show up every day, doing nothing but the bare minimum to stay employed or avoid being fired, yet all the while collecting a paycheck and likely complaining about how little they are paid or how unfair the company is to them.

I know people who have been in this situation for decades…and have long wondered why the employer hasn’t notices or done anything about these people, as in fire them!

Poor performance by co-workers is a leading reason why engaged employees leave their jobs. Good, hard-working employees often leave an employer because they have high confidence in their abilities, a proven track record, know they are talented and won’t be looking for work long. They choose to leave disengaged employees and the employer who tolerates them, behind. If you want to know why a mediocre organization stays that way, read this paragraph again.

It takes the typical manager nine months to recognize unacceptable work patterns; the manager waits on average another three months before addressing the issue — if it is ever addressed. In some companies it is really never addressed.

Why do people become disengaged and unproductive? TKG has identified six major reasons.

The single biggest reason for disengagement is that there is a mismatch between the job and the employee. Applications and resumes focus on past activities and results. Jobs being filled are most often for what is needed in the future. In addition, jobs are defined by tasks to be accomplished instead of the values, behaviors and personal characteristics needed for success in the company.

The book states that within the companies surveyed, 72 percent of managers have failed to acquire interviewing, hiring and profiling skills. Less than one third of the companies use hiring tools, position competencies, job profiles, behaviors and beliefs or selling/service assessments.

This lack of acceptance and use of professional tools in recruiting perpetuates poor hiring.

A second reason is that an employee suffers from culture shock. This happens when a new employee joins an organization that is far different from the one they left, or when two companies join together, whether it is a merger or an acquisition. People see the differences between themselves and the place of employment. The process of disengagement begins when they cannot reconcile the two.

The third reason is being overworked and under appreciated. People become disengaged when they have a heavy workload, put in long hours and there is a lack of demonstrated appreciation. High performers often are asked to take on more work because managers know that this kind of employee will do what is needed. But a lack of thanks for the effort is not tolerated by the engaged for long, especially as they compare their efforts to their disengaged colleagues.

A fourth reason is the perception that managers play favorites. Someone not considered a favorite may tend to become disengaged from their supervisor and the organization. According to the research conducted by TKG, 83 percent of the managers hire people they “like” rather than what the job requires. It makes sense from a human perspective that managers would spend time with those people instead of spending time with people they were lukewarm to or did not like. Sixty-eight percent of an employee’s productivity, however, is directly attributable to the supervisor.

Employees at any level can become disengaged but it hurts the organization considerably more when that disengaged person is a manager. The fifth reason behind disengagement is the impact of a “bad boss.” A disengaged manager affects employees throughout the company as well as other managers. The performance of an employee will move 30 percent positively or negatively based on the environment they work in; their immediate supervisor creates and maintains that environment.

The sixth reason is that the “Peter Principle” kicks in. People accept promotions because they need or want the money and may want the prestige that goes with a new title. But someone who is promoted is often given more responsibilities; more work and that may breed resentment unless it is accompanied by continued praise and appreciation.

Employees become disengaged for a variety of reasons but that does not mean those employees have to stay that way. Who in your organization has quit but failed to tell you?

Organizations are built on people. The only true long-term competitive advantage any organization has is the people employed and working inside of it.

It could be argued that in many industries the business model has been established so that just about anyone could work in a company at lower levels and the company would be just fine because the organization’s image was strong enough to overcome the so-so performance of the employees.

The people in an organization set the tone and attitude that creates the company culture. And, each of us has our favorite companies, some we tolerate and some we will never do business with. How we feel about these companies is almost always a result of our experience dealing with the people employed there.

What is not often recognized or understood is that to the customer, the employee they are dealing with at that moment is the company.

When an issue arises at the counter of a quick serve restaurant, the check-in desk for a car rental or while talking on the telephone with a company representative, do you want to be dealing with the best possible employee or the one that was hired because they needed a job?

Think about your own company. Whom do you want dealing with your clients and vendors, the best you can afford or someone who just needed a job, any job and your organization was “lucky” to hire them?

Very few organizations with less than stellar people do a consistently good job of taking care of clients without having problems in service, quality and client retention.

Hiring and keeping the best employees is always a challenge; finding fair employees is never a problem.

I believe that one very good employee is worth at least two, and possibly more, fair employees. If you follow baseball, all you need to do is look at the Los Angeles Dodgers. Having Manny Ramirez on the team and paying him a salary of $20 million sounds like a lot until you consider that Jason Schmidt and Andruw Jones make a combined salary of $29.9 million and neither of them contributed to the club in a meaningful way this season.

Today is a good a day as any other to decide to divide your employees by putting them into two categories: those that are very good and those that are fair. Put another way, who are your A and B employees and who are your C and D employees?

Regarding your A- and B-rated employees can you answer the question that the organization is paying them more than your C and D employees? If not, why not?

Does that mean you should fire those that you have rated C and D employees? No. What it means is that those employees need to have their performance reviewed and discussed.

It is probably time to sit down and explain to every C and D employee what they need to be doing that they are not and what they need to stop doing and get started doing to help the organization.

It doesn’t have to be a difficult conversation. It can, in fact, be an enlightening one for both parties.

I was impressed by the actions that one owner took when he became frustrated with a key employee. He told the employee that it was time for her annual performance review and that she was to list her goals and then rate herself as to how she was doing on each goal. He told her that he would do the same and once they both had completed their independent assessments, they would meet and discuss their findings.

Once they sat down, several things were revealed. The first was that the owner had not been clear about telling the employee what his expectations were. The second is that the employee had assumed she knew what the owner wanted. Neither of them was wrong and neither of them was right. It was an issue of not communicating effectively with each other.

This misunderstanding was the source of his frustration and her belief that she was doing what her supervisor wanted. They proceeded to discuss closing the gap between expectations and execution and since that time, have worked well together.

Neither owners nor employees are immune from hearing the continuing bad news about the current economy. Hiring the best still matters. In fact, in a slowdown, every company should be looking at what it will take to keep their best employees instead of letting them leave for a competitor.

As for those C- and D-rated employees, wouldn’t some of them serve you better by being on the payroll of your competition?

The current financial crisis has owners, managers and employees worried about their companies, their jobs and their futures.

More than 20 years ago I went through something similar as a manager and employee.

The company I was working for eventually went into bankruptcy. I can see now that the leaders of the business could have handled the situation much better than they did. I could have done some things differently as well.

It wasn’t a pleasant descent from working for a solid midsize consumer products company to getting your paycheck in the form of a cashiers check every couple of weeks.

Looking back
Hindsight is almost always 20-20. I write this years later without malice or anger, just from a vantage point of someone who has gone through what many people today are experiencing: employed but with an uncertain future.

The company that employed me also employed some of the most dynamic and interesting people I have ever worked with and for. They were professionals and the politics, as improbable as it sounds, were so minimal that it was an absolute pleasure to work there. Everyone was focused on getting along and getting their jobs done.

The turbulence started when the company drifted into a cash crunch. One day we were flying along, safe and smooth, and the next day it seemed people were being bounced around without knowing what was happening.

The leadership responded by doing a cut-back on personnel. We were overstaffed, so the idea of some people being asked to leave wasn’t unexpected.

Not very many people left the first time there was a layoff. But three more layoffs followed at roughly 60 day intervals.

The leaders could have better communicated about what was taking place. No one liked working in the “dark” without some understanding of what was taking place. What I wished the leaders had done is leveled with everyone about what the situation actually was.

Like far too many people in an organization, I was making a good salary and was expected to be a good soldier, so who was I to ask the tough questions of the leaders?

I should have, because the truth then, as now, was that it was my company. I worked there too; I worked very hard there and was dedicated to the success of the organization.

I did not have skin in the game; I was not a shareholder. But I was taking a significant risk to my reputation, career and finances by working for a company that couldn’t afford to keep me on the payroll.

I should have had one of those “fierce conversations” with my boss and his boss to demand what was going on.

Loyal soldiers, however, whatever their rank, aren’t supposed to question the wisdom of generals. Generals by virtue of their rank are supposed to know everything.

The leaders could have developed and shared a plan that they wanted the managers and employees to implement with the goal of turning things around. That meant getting out of the cash crunch.
Later it surfaced that no one was getting financial reports explaining what had happened and no one was calculating any projections to see what was going to happen.

It was if the accounting and finance departments had stopped doing their jobs. Yet these folks showed up daily, acted as if they were doing something and kept getting paid. What they produced, no one knew.

Led by the blind
In short, the company was being lead by the blind. Not only didn’t the leadership know what was going on, they didn’t know when or how it would end.

As leaders, they failed the company because they did not have the proper tools to successfully manage the business.

As leaders, they failed the employees and the families of those employees by not communicating anywhere near as often as they could have or should have about what was taking place.

As leaders, they failed to understand the emotional impact of putting hard working and loyal people through the turmoil and pain of the long slide into bankruptcy.

In the book Good to Great, author Jim Collins refers to “facing the brutal facts of your current reality” and the leaders of this particular organization chose to ignore reality. They also ignored the brutal facts.

After almost a year of this, I was laid off, whatever that means. I took it to mean that I was out of work, in a city where I knew very few people. I felt anger, pain and despair, but I landed on my feet and moved on.

During that dark year I asked myself more than a few times “what is going to happen to me?” and the answer was always the same: when this job is over, find another one. It may take some time, but someone will hire you because good, hard working people are always in short supply.

Johnny has been working for the company for almost a year. He is looking forward to his first performance appraisal and hopefully, an increase in pay. Johnny thinks he has done a pretty good job and sees himself on the way up.

The owner’s view is that Johnny will soon be in line at the unemployment office.

There is nothing more frustrating to an owner then seeing an employee not performing.

An owner sees an under performing employee as a dollar figure, not as an investment for greater contribution.

Given that some companies are continuing to reduce headcount, it would be good advice for anyone working today to do the best job possible for the organization providing them with a paycheck.

People working today understand this. But this won’t happen through the efforts of the employee alone; the opportunity for deeper engagement lies elsewhere in the company.

Most businesses have at least one Johnny on the payroll. Coworkers like Johnny; he is pleasant to work with. Johnny is on time, doesn’t fool around; is not a burden to his boss.

The owner takes a different perspective. When the owner sees Johnny, he silently asks, “Why is he on the payroll? What does he do all day? What results is he generating and when will I start seeing what I expect from him?”

Eventually the owner shares these doubts; first hinting in reserved tones in private conversations and shortly thereafter, openly asking questions about Johnny’s value to the organization.

Why isn’t Johnny meeting expectations? Why is the owner becoming increasingly angry at Johnny?

One place the owner might look is at Johnny’s supervisor and the entire chain of command.

Johnny’s supervisor never had a formal discussion with Johnny, followed up in writing, about what Johnny needs to do and the results he needs to generate. There were likely some informal discussions along the way and Johnny followed through with those.

What Johnny has heard from his supervisor is, “Keep up the good work!” Or, “Don’t do that anymore.”

As a result, Johnny doesn’t know, doesn’t understand and cannot be held responsible for not doing what he is expected to do or the results he is expected to achieve. This assumes Johnny understands how to do the job he was hired to do; otherwise he never would have been added to the company payroll.

Johnny isn’t clear why he is on the payroll. Johnny was never told “We have hired you to achieve these results…in this time frame.” He never received any objectives in writing.

Johnny has wisely decided to become a charter member of the company culture and go along with what everyone does. Johnny does this to keep his paycheck and avoid getting on the bad side of his supervisor.

When Johnny’s supervisor hears that the owner is unhappy with Johnny’s lack of results, he wonders what the owner thinks of him, the person responsible for supervising Johnny.

Johnny’s supervisor failed Johnny. The supervisor might argue differently, but written evidence detailing specific, measurable, actionable, realistic and time bound objectives won’t be found.

Did this critical document disappear? Was it destroyed? Misplaced? No. It was never created in the first place. How could this have happened?

The reason behind this glaring error is that Johnny’s supervisor never received anything in writing from the chain of command above.

The owner never said or wrote what any objectives were or how they were to be measured. Those who report to the owner simply followed his lead: the owner set the example by providing nothing.

Those who report to the owner determined that objectives must not be important. As a consequence, Johnny’s supervisor received nothing about what Johnny was supposed to accomplish.

Despite being in business for years, job descriptions were never written; objective hiring evaluation forms never developed; specific, measurable, actionable, realistic, and time bound objectives were never established for each position; evaluation training was never conducted; authority to hire and fire was not given to the appropriate levels in the organization;  performance appraisal forms never developed.

Johnny is looking forward to his annual performance appraisal. He is about to find out that his employer doesn’t give them. What about the raise for Johnny? Johnny can forget about it.

The owner might be frustrated with Johnny and wonder why Johnny isn’t producing the desired results, but the owner has no one to blame but himself.