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“Input - Output” The Pareto’s Principle

“Input - Output” The Pareto’s Principle

Posted on 11th Aug, 2021

“Input - Output” The Pareto’s Principle

The relationship between input and output is rarely, if ever, completely balanced. According to the Pareto principle or the 80/20 rule, for most things, 80% of our results come from 20% of our efforts.

While initially this concept was used only to refer to the distribution of wealth among people, experts over the years have come to suggest that this principle can be applied to many other things, including organizations.

The employees of any organization are a big factor in impacting the success – how skilled, sincere, and knowledgeable they are, is directly proportionate to how quickly the company grows, achieves its goals, and yields positive results.

Applying the pare to principle in the context of an organization, and specifically in the context of the company's human resources, it could mean one of two things:

  • Approximately efforts by 20% of employees, contribute to 80% of the company's results. Thus, learning to recognise and then focus on this vital 20% - the floor leaders, managers, and other key thinkers in your organization - is the key to making the most effective use of the organization's human resources. That said, it can be difficult sometimes to identify who these 20% of the hardworking staff really are, and care must be taken before dismissing any employee's contribution as unworthy.

  • In terms of employee management, most (80%) of the problems in an organization are caused by a small number (20%) of employees who simply don't work, work poorly, and commit many mistakes, leading wastage of time, energy, and resources.

The 80/20 rule not only allows us to distinguish between the kinds of employees who are productive or those who cause chaos, but also offers some guiding principles on how to empower employees to do their best:

  • 80% decision making by employees: Employing such management practice empowers every employee to create their own set of goals and identify the key steps needed to achieve those. This allows for opportunities to share ideas, think deeper, and participate in many company initiatives. As a leader, employer, or manager, one should shoulder restrict oneself from undertaking more than 20% of the decision-making.

  • 80% time spent listening to employees: The main role of a manager is to guide their subordinates, not to take on their work. Thus, 80% of the time should be spent on listening to and guiding them, not just telling them what to do. Ideally, after expectations have been set and the employees having received the right amount of coaching and feedback, it's time for the leader to listen about the path taken by the employee and monitor their progress.

  • Focus on the 20%: In any company, daily operations are bombarded with so many little, less significant tasks, such as answering phone calls, making reports, reading memos, etc. However, spending most of their efforts in the most important tasks, instead, can help employees accomplish more. It is important for managers to give feedback early to ensure that their staff are on track with their weekly or quarterly goals. Thus, instead of completing just the requirements of a project, employees can focus on doing it in the best way it can be.