National Association of Counties * Washington, DC           Vol. 31, No. 2 * February , 1999

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Applying the Pareto Principle

In the late 19th century, an Italian Economist, Vilfredo, Pareto investigated the distribution of income and wealth in society and found it to be unbalanced but predictable.

He described the concept of the "vital few" or the "80–20" rule. What he found was that, regardless of location or historical time frame, 80 percent of the wealth was generated by 20 percent of the population. Work efforts should concentrate, therefore, first on the "vital few."

This concept of the "vital few" has implications for public administration in general and HR in particular.

Managers often notice that a large portion of the time they spend on issues of supervision and personnel management (could it be 80 percent?) relates to a relatively small percentage of the work force. The same employees repeatedly demonstrate performance or behavior problems. They take up inordinate amounts of supervisors’ time.

Conversely, a percentage of employees consistently demonstrate unusual dedication, skill, work habits and success. By their diligence, they make the manager’s job easier and more enjoyable.

As the HR Doctor regularly points out, all managers are human resource professionals, whether they recognize that role or not. They cannot be successful as engineers, accounting managers, sheriffs, fire chiefs, leisure service directors or health professionals without understanding and becoming astute practitioners of human resources. What are the implications of the concept of the "vital few" for all HR managers?

First the manager must avoid a serious weakness that is demonstrated all too often. That weakness is "walking by something that is wrong." The manager who knows of a performance or behavior failure, who sees unlawful discrimination, or inappropriate, offensive language at work makes a major mistake by ignoring the situation or "walking by it." That kind of behavior empowers or "enables" the offender to do it again.

What should happen is that the manager should concentrate on this kind of acute behavior and stop, interrupt and correct it promptly. By taking these actions, the manager is focusing attention on the poor performing "vital few" and is making an investment. The investment consists of correcting and, if necessary, sanctioning behavior which, when properly administered, will address the problem honestly and directly.

The "return on investment" for the manager who does not walk by a problem will be that the liability will be reduced. The offender will more likely than not come to an understanding that the behavior which is offensive or inappropriate must stop. If that understanding is not reached, the manager will have set the stage for effective sanctioning including, if necessary, termination.

In this case, the return on investment for the manager is the correction or removal of a person’s behavior which, if left untreated, would become a spreading virus. Looked at selfishly, the manager’s prompt and effective action will have saved him or her time and energy, which can better be spent on more positive activities.

Second, all of us can spend more time on acknowledging the major contributions of the excellently performing "vital few." Recognition programs, rewards, access to additional diverse responsibilities can motivate this positive vital few to perform even better and to encourage other staff members to improve their own work habits.

What can occur is similar to the spreading of a "positive performance" antibody in the work place. The vital few can become the "vital many" with that kind of encouragement.

You can perform a "vital few" analysis in your own work place or your own personal work habits. It is often as simple as a data gathering activity or a "content analysis."

Review the history of grievances and disciplinary actions in the past year. Correlate it with attendance records reflecting those employees who have had the most repeated incidents of unanticipated absence.

You may find that what emerges is a road sign or guidepost to help you best use training resources available through HR. You may also identify, on the plus side, the most likely candidates for skills development in a leadership program, succession planning, or other positive ways to commit agency resources. Review your own work patterns and efforts to try to identify the "vital few" elements of your work that produce the most important positive results. Then, concentrate on those efforts!

There is another use, however, for the "vital few" idea, one which probably even HR Director Pareto, hundreds of years ago, did not consider. That is the role of an employee’s family as the "vital few" in his or her personal life. The HR Doctor prescribes that each of us spends more time than we now do nurturing our relationships with our family members and friends and never taking them for granted.

For the employer, this also means ensuring that the benefit program is flexible, family friendly and responsive to life stage changes that affect all of us. Our benefit needs are different when we have young children than when we are "empty nesters" approaching retirement or unmarried, single employees.

Use the "vital few" concept and think of new ways to apply it to situations in your work life. The result will likely be very positive and a demonstration that the thinking in place hundreds of years ago – whether it is the concept of civil service or the Pareto principle – can often be repackaged to be of great benefit to people today and tomorrow.

If you would like to contact the HR Doctor to discuss concepts and services, please use the e-mail address below. Best wishes.

(If you have questions for the "HR Doctor," e-mail him at philrosenberg@prodigy.net. Rosenberg is the Human Resources director for Broward County, Fla.)