People differentiation is critical to performance management. Differentiation requires that business leaders assess their employees and separate them into categories based on performance:  Top 20, Middle 70, and Bottom 10. The top 20% are the stars and must be treated like stars. Rewarded and recognized for their contributions. Showered with praise, respect, bonuses, training and a variety of rewards. The middle 70% need to be managed differently. Their skills, energy and commitment are important. You need to keep them motivated and engaged. You need to train them, give them positive feedback and do thoughtful goal setting. For the bottom 10%, they must go. Maybe they don’t fit the culture. Maybe they will be stars somewhere else. Part gracefully. Help them make the transition.

Companies win when their business leaders make a clear and meaningful distinction between top and bottom performing people. And companies suffer when every person is treated as same.

Our experience of building high performance organizations tells us that making a clear differentiation amongst high, middle and low performing team members and “acting accordingly” is key to achieving superior organizational performance.