Acceptable Performance – 50% of a Top Performer?

Why Does This Happen? 

You might ask why organizations do not address performance gaps.  It’s a combination of setting standards, leadership and tolerance.  

Setting Standards 

Establishing minimum standards is crucial, particularly regarding production standards. Let us focus on an end-type production standard, such as the number of customers cured or saved. 

Setting expectations demands clear guidelines from collection leadership. However, over time, these often lead to a common issue: setting standards that are easily met with minimal effort. When collectors hit these benchmarks, many ease off, content to coast until the next evaluation period. Meanwhile, others maintain their momentum, consistently outperforming their peers.  What are challenges to setting expectations: 

• Relying solely on current performance reports can be misleading, especially if there is a wide variance in team performance. Merely averaging team performance perpetuates gaps. Setting standards closer to top performers might leave a sizable portion of the team falling short.   
• Many organizations adhere to traditional Bell Curves for annual appraisals and align the monthly expectations accordingly.  This approach continues to widen the gap between top and lower performers. 
• Establishing standards for teams with diverse work types is not practical. Comparing collectors handling skip accounts to those managing 0–30 day accounts is like comparing apples to oranges. Aligning collectors based on similar work types is essential. 
• Failure to update standards due to history can stagnate portfolio performance amidst staffing changes, shifts in strategy, seasonal fluctuations, or economic impacts.   
• Collectors’ lack of confidence in reported production numbers leads to blame-shifting. Leadership must ensure reporting accuracy to hold collectors accountable effectively. Regular evaluation and justification of production numbers are essential. 

Leadership 

There is a lack of skill or time in the collection organization around coaching collectors and holding them accountable for meeting expectations.  Coaching is a significant component of the performance management process and must be present to enable an operation to consistently deliver strong production results.  What does good collection leadership look like for a manager or supervisor: 

• A strong understanding of collection production metrics is essential. Understanding how enhancements in one aspect can impact overall results is crucial. For instance, if a collector is handling 10 accounts per hour, and analysis reveals that it takes an average of 120 seconds to effectively work an account (with 2 right-party contacts and 8 no-answer or left messages), simple math shows there’s ample time available in every hour (If you actually do the math, there are 3600 seconds available every hour and this collector is working 1200) to handle more accounts, ultimately leading to more cured or saved customer accounts.. 
• A manager or supervisor is busy working accounts or doing email and does not have time to lead their team. Collectors need coaching and feedback to help them optimize performance. Leadership should be interacting with each collector daily challenging them to deliver optimal results and eliminate obstacles that create problems. 

• Collection managers or supervisors need to be held accountable for their collector team’s performance. If there are collectors that are delivering a fraction of what the top performing collectors are delivering, leadership should be held accountable. For example, a manager or supervisor could be evaluated on the performance delta of their top performing and lowest performing collector. The narrower the delta, the higher the performance of leadership. One requirement is that the overall team performance must meet expectations, so a narrow delta of an extremely low performing team is not acceptable. 

Tolerance 

Within the organization, there exists a culture of tolerance, where turnover among collectors is often seen as a measure of success. However, maintaining a zero percent turnover rate throughout the year may not always indicate optimal collection performance. In fact, if the organization struggles with setting expectations and leadership capabilities, a low turnover rate is often the result.   

Another rationale for not exerting too much pressure on the collection team is the difficulty in finding replacements. It can take months to obtain approval for a new collector and even longer to find a suitable replacement. Moreover, there’s uncertainty whether the new hire will match the performance of the departed collector.  The impacts of not managing low performance are significant: 

• Low collector morale within the team, which may go unnoticed if not actively monitored. Top performers, often newcomers, may feel demotivated if they consistently outperform tenured collectors yet earn less.   For example, if you were running a race around a track and kept passing the low performer before the end of the race, yet the low performer also got the same trophy, were you recognized for passing the low performer once, twice or three times? 
• The phenomenon of a “de-learning curve” is real. Collectors may initially excel but gradually learn to do just enough to stay under the radar, leading to a decline in production. Consistent reward and recognition (a performance management component) is vital; top performers should be acknowledged for their achievements, while underperformers need to be challenged to improve or consider other options. 
• Limited focus on developing a strong recruitment process.  A flawed recruitment process affects the team’s ability to consistently attract top talent. Some turnover is healthy, as it allows for the influx of new collectors who can strive for excellence and contribute to the pool of top performers. However, low performers must be held accountable and not given indefinite timeframes to improve. Embracing turnover, to some extent, is essential for maintaining a high-performing team.