Color coding employees : Is it a Smart Practice?

We have heard about color coding for the purpose of environmental health and safety, workplace hygiene, electrical wiring, to denote position in an organization chart etc. However, some organizations go to the extent of categorizing their employees on the basis of their performance and abilities. In general practice, the employees are tagged as A players, B players and C Players by their team leaders.

A players are star performers. They are employees who put their profession upfront ahead of their families and personal lives because they are striving to accomplish more or move upward in the organization. A players are the risk-takers, the “high potentials,” and employers enjoy finding and hiring them. They are also the players most likely to leave the organization for opportunities elsewhere.

B players are competent, steady performers who balance their work and personal lives while committed to their job responsibilities. B players are steady, don’t require a lot of attention, and they get the job done. Because B players stay, they tend to carry the corporate history with them.

C players are performers who are not achieving enough to satisfy their employers and are most likely to be asked to move along.

Coding the employees and associating them with colors help to simplify the process they were to categorize their associates into one of three categories:

The categories usually refers to “A” players, “B” players, and “C” players. The tendency is to see this as a negative practice, but it’s really a way for companies to determine where to spend their limited training and development budgets. The practice also plays a role in succession planning.

Can you stick a label on each person to identify them as an A, B, or C? More importantly, should you?

Do you spend your training budget on a “C” player who is disengaged or would you invest on an “A” player who is a superstar performer?

For some developmental large projects, it’s a necessity. You need to know who your go-to people are in a pinch. You need to know the go-getter to make sure things get accomplished, no matter how much effort it takes. (A players!).You also need to know who is going to be a strong choice for that long term project. It’s not particularly interesting or high profile, but it requires some who is steady and reliable. (B players!). And definitely at all times you need to know if there are any non-performers that need to be removed. (C players!)

But maybe it’s not the best way to “box” your people in? Are you tagging a label based on their current performance/situation which will change over time? Are you differentiating the employees based on their performance?

On the contrary, by not differentiating employees based on performance, you can create a culture that supports and encourages poor performance. If you don’t treat the “green” employees (A players) differently from the “red” employees (C players), the good ones will naturally trend lower with regard to performance.

Furthermore, how does the A and B players feel about C (and D) players?

The A and B players resent the C (and D) players. They feel like they are a complete wastage of the company resources and need to be removed. Of course if one of them slipped into C territory for any reason, they’d expect leniency.

Do we really need some of each? I’d say yes. Even if you’re hiring all “A” players you are going to eventually have some of them settle in as “B” players on the long run. At that point do you kick them out even though they are still a valuable contributor? What if one of them has a tough time dealing with some loss or some emergency and drifts into “C” player territory for a short time?

These labels are be temporary ratings. People change, they grow, they get grumpy, they lose interest and therefore you need to reevaluate them quarterly or at least annually. Ratings enable us to determine who we should invest the most in developing. The goal is to convert D players (not meeting the job requirements) into C (average performers who meet the minimum standards) or B (solid performers that consistently perform) players. As they are temporary, the C players might just be A/B players who need a shift in their focus or rather more reinforcement.

Learning and growth are the ultimate retention mechanism for these key people – so we should do our best to give them opportunities to do both.

We are all different with different needs and interests while we may be offered all the same equal opportunities, all employees shouldn’t be treated exactly the same. We cannot treat the “A Players” the same as “C players”, then there won’t be A players much longer.

I’d love to hear some ideas on how you might have handled this differently or if you think it was the right way to go.