Jack Welch always got a lot of flack from people about "differentiation" (GE's program of cutting the bottom-performing 10%).
I think the key (and I don't have a lot of experience with folks who work at GE, so I can't speak to it's validity) is that it works if deployed as part of an overall system.
That system is that you reward the top performing earners heavilly (with bonuses and promotions), and remove the bottom 10% annually. In theory, people are constantly being kept abreast of their performance, and given opportunities to improve; so that those in the bottom 10% shouldn't be surprised when the end of the year comes and they are laid off.
Welch defends the practice by talking about the alternate scenario where people are kept on staff for years who aren't performing well, have never been told that is the case, and are suddenly surprised when one day the company needs to have layoffs and are terminated. He calls it "false kindness".
I've always like the part of Differentiation where you let people know where they stand. I've thought it would be nice to work somewhere that had a better model for performance reviews (where I work presently, they are basically a checkbox).
I'd love to hear from someone at GE as to whether the system actually works the way Jack Welch describes it.
I think the key (and I don't have a lot of experience with folks who work at GE, so I can't speak to it's validity) is that it works if deployed as part of an overall system.
That system is that you reward the top performing earners heavilly (with bonuses and promotions), and remove the bottom 10% annually. In theory, people are constantly being kept abreast of their performance, and given opportunities to improve; so that those in the bottom 10% shouldn't be surprised when the end of the year comes and they are laid off.
Welch defends the practice by talking about the alternate scenario where people are kept on staff for years who aren't performing well, have never been told that is the case, and are suddenly surprised when one day the company needs to have layoffs and are terminated. He calls it "false kindness".
I've always like the part of Differentiation where you let people know where they stand. I've thought it would be nice to work somewhere that had a better model for performance reviews (where I work presently, they are basically a checkbox).
I'd love to hear from someone at GE as to whether the system actually works the way Jack Welch describes it.
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