Tuesday, August 16, 2005

No Quotas

As mentioned in my previous post, I am reading the Jack Welch book. Today I would like to discuss his performance evaluation strategy that he implemented at GE.

Everyone falls into one of three groups:

A People - These people are leaders, top performers, energetic, and can execute. These people make up 20% of your team.

B People - These people are very diligent and have great potential to be an "A" person. These people make up 70% of your team.

C People - These people are underperformers, do not have potential to be an "A" let alone a "B" person. These people make up 10% of your team.

Here is the falicy. The managers at GE are required to put 20% of their team in A, 70% of thier team in B and the bottom 10% of their team in C. The C people are let go. The problem here is that they are being compared to only their team. It is quite possible that someone rated a C on one team may very well be a B or even an A on another team. Besides that, if a team is full of A people, that is too bad, managers must select 10% of the team as C. What would your organization look like if 10% of your workforce is cut every year because of a quota that must be met?

I do agree with much of what he says but by putting a quota onto letting people go is never good for morale.

Monday, August 08, 2005

Jack Welch - Straight from the Gut

I was in the dollar general store in my town shopping for some prank gifts for a family members' 30th birthday party and I saw Jack Welch's book there, I couldn't resist picking it up for only a buck. Today's topic will be based on what Jack calls his basic management beliefs, behind his beliefs (which are bolded) are my comments about that particular belief:

1. Competing hard to win. I believe in this statement, if we do not compete hard, we will not win and we chance everything to luck.

2. Facing reality. If we do not face reality we will slowly dig a grave for ourselves in using ignorance for our shovel.

3. Motivating people by alternately hugging and kicking them. WHAT, "kicking", while I understand what he means by kicking, I would hardly use that word to describe it, maybe pushing or stretching. I we are too aggressive we will "kick" them right out of the company.

4. Setting stretch goals. It is very important to set goals that are sitting just on the other side of "things I have never done" other wise you will find yourself standing on the shores of mediocrity.

5. Relentlessly following up on people to make sure things get done. This is ridiculous, all this means is micro managing. If I have to relentlessly follow up with people then I have the wrong people on my team.

At the end of the day, Jack Welch ran a successful organization at GE using the basic management beliefs stated above.