The employment practices of most firms promote mediocre performances. This happens any time an average worker gets or holds a job over a better worker.
No, this does not refer to errors in judgment. It refers to practices. These practices bake mediocrity into the way firms hire, keep and release employees.
For instance, letting go a poor worker is judgment. Hiring a good worker over an average one is too. In such areas, firms have practices that purport to give the edge to the good over the average.
The Average Performing Incumbent Bias (APIB)
Yet, as a counter example, consider this. A firm has an average, not poor, worker in a job. Then, it runs across a truly great hire for the same job. What does it do? Most times, “It’s a shame,” they say, “that we don’t have an opening.” Sometimes, they add a job. They make room.
Now, take any sports team. When it runs across a better player at a position than it has, it lets that one go and brings in the better one. That does not happen in the workplace. Firms keep the average one. That’s the average performing incumbent bias.
Granted, many points exist why this happens. Let’s name a few.
First, more hard data exists on sports players than on everyday workers. Much of it is public too. Second, hiring has risks. There are no guarantees that the new hire will be better. Third, turnover costs play into it too. How long will it take the new employee to get up and running? Finally, there’s loyalty. Does that count?
Still, these only support the existence of APIB.
Common Employment Practices That Promote Mediocrity
With that take this scenario. A manager comes into your office excited from finding a great talent. She says, “I just found the best person to run our ops department.”
Puzzled, you say, “I didn’t know we were looking for someone. We have Sam.”
“Oh, but this one’s much better.”
“What about, Sam?” you ask.
“Well, can’t we just let him go?”
Remember, Sam is not a bad worker. He’s just not nearly as good as the recruit. Sometimes, firms will move Sam to another area. Still, unless he forces someone out, the firm adds a body. The cost of hiring talent just jumped. The return on that talent drops.
Now, take firms that still use biased hiring and promoting practices, still cut training and onboarding, and still overrate loyalty and seniority. When we combine them with APIB, we get a set of well-entrenched, common employment practices that promote ho-hum work.
This does not even include the ways national, regional and local labor laws reinforce these practices. APIB lives.