Know your ABC

I am almost at the end of my Jack Welch book. He spends a bit of time describing the GE performance management system, and how staff were rewarded with options.

Everyone was graded each year into an A, B or C. The system was quite strict in that managers could only grade something like 20% as A, 70% as B and 10% as C, and the catch was that you had to grade 10% as C. There is no getting around it. That 10% are the group that you then have to fire.

As far as options go, everyone graded as an A gets options, and lots of them. If you are a B, you might get them, but you might not. The C's of course got none.

Having spent some years now in the land of pubes, this is of course a totally alien concept. Grading your staff and managers. Getting rid of the non-performers. Handsomely rewarding the outstanding staff. Working on the B's to try and make them into A's. Fascinating stuff.

Although we've had numerous performance management systems at work over the years, they've all fallen flat because they are missing these crucial ingredients. You have to grade people on a bell curve, and you must have fixed percentages of A, B and C. You must be able to reward the A's. You have to be able to get rid of the C's.

Until the public service adopts those rules, performance will always suffer.

At one point, I was managing a reasonable number of staff - up to 40 if you include contractors. Although I was never allowed to do it (because it would spark an uproar), I had a mental league table of all my staff, rating them in order of performance and value from 1 to 40. I could have told you in a moment who were my A, B and C's.

The interesting thing is that my breakdown was about 20% A, 70% B and 10% C. I always went to the A staff when I had an interesting or challenging bit of work to do, because I knew that they had the skills and the aptitude to get it done with minimal input from me. The A's have all ended up moving on to bigger and better things. I am proud of them.

The B's got some of the interesting work, but only those at the top of the scale. Some have moved onto more interesting work, but most of them are quite content to stick with what they are doing and not move up (Jack mentions that this was typical in GE too - not everyone wants to be a star).

The C's - well I just tried to ignore them and manage around them. I would have been content to have had an office in the middle of nowhere that I could have just dumped them in, and let them play scrabble all year. At times, the most important thing was to get them out of the way, as they just interfered with what everyone else was trying to do.

It's interesting though that when I looked at some of the business groups that I had dealings with, the proportion of C's was shockingly high. In some areas, it would have been close to 70 or 80%, with the remainder being what I would call "low B's", or a B minus. No A's of course. Those groups struggled to deliver anything, and I always had a hard time dealing with them (because I wanted to kill them all).

People can be fascinating.