Baramee Thaweesombat/Shutterstock.com

GE Saw the Light on Performance, Government Should Too

The answer is not to end employee reviews, but to make them better.

It’s happened again. Another major corporation has dramatically changed the way it manages employee performance. This time it’s General Electric. That’s important because the new approach is in direct contrast to the indefensible “rank and yank” philosophy attributed to former GE chief executive Jack Welch. That process involved a forced distribution of performance ratings, in which the lowest-ranked employees are fired. The new policy, described in a recent Harvard Business Review article, is focused on real-time performance development.

But recent headlines that say GE has decided to end annual performance reviews are misleading. The company’s new approach to managing performance should be closely considered by federal agencies. It has decided advantages. However, GE has not eliminated performance reviews.

If federal human resources practices were ranked using the Jack Welch logic, it is almost certain performance management would be at the bottom and eliminated. An assessment of the practice would be based on three core questions: Does the process contribute to better performance? Does the process help employees to develop their capabilities? Are performance ratings valid and useful in managing careers? There is little evidence that federal practices satisfy any of these purposes.

It’s significant that the authors of the HBR article are not from GE’s human resources staff; one is an operations executive and the other is an engineering executive. That is consistent with an often overlooked point: Performance is a management responsibility. HR is on the sidelines.

The authors make two important points. First, they say, “We’re finding that the new performance-development system is promoting trust between managers and employees—the foundation of high-performing teams.” The new approach is very similar to the role of coaches in sports. Second, they say it has been used “to drive a fivefold productivity increase in the past 12 months.” Both would be profoundly important to government.

It would be to everyone’s benefit to discard the past. A profound difference between the best thinking in the private sector and that which permeates discussions of employee performance in government is the emphasis on poor performers. That is all too evident on the Office of Personnel Management’s website. It follows from the historical focus on performance standards, an idea that gained acceptance in the middle of the last century.

In contrast, companies focus on the high performers. That was GE’s purpose when it adopted the forced distribution policy. Companies celebrate the best performers. The few poor performers are handled quietly and confidentially.

GE’s new approach was summarized as a shift from “command and control” to “empower and inspire.”

The authors say: “At its core, the approach depends on continuous dialogue and shared accountability. Rather than a formal, once-a-year review, managers and their direct reports hold regular, informal ‘touchpoints’ where they set or update priorities that are based on customer needs. Development is forward looking and ongoing; managers coach rather than critique; suggestions can come from anyone in an employee’s network.”

The touchpoint discussions focus on progress in achieving goals, changing priorities, problems that need to be addressed and resources that are needed. It’s an ongoing dialogue that is future focused. They also discuss behaviors, or strengths, that should be continued and areas and ways to improve. The approach is consistent with a continuous improvement philosophy.

They also developed a smartphone app that enables both manager and employee to record performance information—voice and text inputs, documents and handwritten notes.

GE has not discarded the year-end review, but now it’s a summary conversation. The manager and employee jointly prepare a summary document.

It is important to emphasize that GE managers will continue to base compensation, promotion and development decisions on their assessments over the year. There is not a chance a company like GE would back away from pay for performance. Moreover, they need to be able to defend those actions. Under the rank-and-yank policy, GE relied on a three-level rating policy: outstanding, met expectations and failed to meet expectations. There is no reason to think that has changed.

When a three-level policy is combined with another trend, the use of “calibration committees,” it provides assurance that the process is fair. The role of committees is to consider the justification for ratings. The committees reduce bias and discrimination and increase rating consistency.

The approach is likely to be preferable to both employees and managers. The advantages are clear. For managers, coaching has got to be more satisfying. That’s true for their people as well. Yes, for many managers it would necessitate mastering new behaviors. Their subordinates would agree to help. A three-level rating policy would enable agencies to identify their outstanding people as well as the few people who truly are not performing at an acceptable level.

Every employee should know what they are expected to accomplish and how their performance will be assessed. They are likely to also know what would be outstanding performance in their jobs. That should be discussed with their manager at the start of the year. With ongoing dialogue there should be no year-end surprises. And the calibration committees would reinforce the sense of fairness.

GE is among the larger federal contractors. OPM should request a meeting with the GE team that developed the new process. An hour or two of discussion about GE’s experience would be invaluable. The company’s executives might even agree to allow federal agencies to adopt the smartphone app. Government needs a new approach.

(Image via Baramee Thaweesombat/Shutterstock.com)

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.