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More than Jack Welch: Should We Fire Everyone Who's Doing an "Adequate" Job?

Up and out.  Fire the bottom 10%.  You know the drill: the Jack Welch rules...

Henry Blodget asked a similar question at the Business Insider, a Wall Street digital publication:Superstar-superstar-9913716

"Should we strive to find only "A" players and quickly release any "B" players to make room for more potential "A" players?)

Netflix does this. 

Importantly, Netflix believes in paying "top of market" for all of its A players.  In other words, it pays them as much or more than any of its competitors would pay them.  To its credit, Netflix also tries to pay its A players top dollar BEFORE they get an offer to leave.  So Netflix is using both carrots and sticks: If you can earn and keep your place as an "A" player, you'll be handsomely rewarded for it.  If you can't, then you'll be free to work somewhere else.

So, should we sack everyone who is just doing an "adequate" job?

I find Netflix's logic very persuasive (especially the part about being a team, not a family), but I do have some lingering doubts.  On the one hand, I absolutely want us to build the strongest team we can--one composed entirely of "A" players.  I want to reward the A players by making them feel appreciated and rewarded, and I don't want to demoralize them by having them feel like they're carrying the "B" players' dead weight. (We don't employ "C" players for long).

On the other hand, unless this policy is spelled out clearly ahead of time (which it certainly could be) it seems harsh to inform a dependable if uninspiring B player that they're doing an "adequate" job--and, therefore, that they're done.  We therefore try--probably for longer than we should--to help the "B" players become "A" players.  Unfortunately, as companies like GE and Goldman Sachs have long known, it doesn't always work. (GE and Goldman fire 5% of the workforce every year, just to keep strengthening themselves)."

It's sexy to think you can achieve what Henry is outlining, but let's think about this for a second.  The much discussed GE policy of firing the bottom 10% is the BOTTOM 10%.  What Blodget is describing, and what many of the Netflix presentations allude to, is that we shouldn't tolerate "meeting" expectations.  That means a WHOLE bunch more employees than the GE policy of the bottom 10%.

Of course, it all depends on your Bill Clinton-like "definition" of meeting expectations (I did not have... never mind).  And a bunch of other factors you can find people talking about by clicking through to read the comments of Blodget's post and looking at this discussion over at the HR Technology Conference LinkedIn group.

You want to fire your adequate performers because they're not stars?  Random thoughts:

--Your best people are the stars, and those below their performance level are "adequate".  How's that compare vs. what you'll find in the marketplace of candidates?

--Your job is to migrate adequate performers to star status.  How ya doing on that?  How are your front line managers doing on that?

Whoops.  Maybe you're not ready to fire the solid - but not star - performers after all.

It's tough when a theory that's cool doesn't transfer to what you can use.  I wish the real world would just stop hassling me.

Comments

Charlie Judy

Not sure you can classify "b" players as "adequate." I think you have to have at least 2 levels of employees that you invest your time and attention in - the A's are the ones you shower with love, attention, and continual investment - they are the one's who consistently exceed the expectations set forth by the role and/or organization and are regularly considerd at the top of their peer group. The B's, on the other hand, are the backbone to business in the ordinary course; they are by default, because not everyone can be "at the top", the one's who keep the train on the tracks. they may not necessarily push it down the tracks as quickly as the A's, but you still need them to keep the thing going...and they have demonstrated a potential for some day being an "A." If they don't become an A, but stay a steady B, that's cool - you gotta keep 'em and you gotta still pay attention to them. There just aren't and never will be enough A's to go around. The C's, on the other hand, have to be given a line-in-the-sand. And if they are still a C when that line is encountered, it's time to go bye bye. Nothing Harsh about that in my book. Cool theory isn't often pragmatic. Great Post!

Brandon

Another question that could be raised from this philosophy is: is it really worth the turnover cost to fire a "B" employee to hopefully find an "A" employee. Let's face it, stars are not a dime a dozen. Thats a pretty big risk and a huge waste of time if you end up hiring what appears to be an "A" employee only to find out that he/she is a "B" or worse yet a "C" employee. Pretty big gamble if you ask me. But then again, I'm probably not as good of interviewer as those who take that risk. I'm sure Kris could guarantee enough all-star hires to implement this policy :).

John Melvin

I like the quote from Knute Rockne on this subject. "The secret is to work less as individuals and more as a team. As a coach, I play not my 11 best, but my best 11". Theres more to performance than just superstardom.

survivor

I guess a company can afford to fire the bottom 10% if it's able to attract a deluge of the best talent around. If not, then the constant firing/hiring/retraining process would be quite expensive and disruptive to internal teams. A high turnover rate is never good for consistency.

Rob Bartlett

I am reminded of Caddyshack and Judge Smalls "the world needs ditch diggers son" Does every position need a super star, how have you designed your organization. Need some work horses in with the thouroughbreds.
Rob Bartlett

Brandon

I agree with the bottom 10%, but this article is saying "B" performers. These are good employees who get the job done, just not superstars. That's a tough sale.

Michael D. Haberman, SPHR

If football teams followed this philosophy teams would consist of only two or three players.

Chris Walker

Sounds like a move to Lake Wobegon, where all the women are strong, the men are good looking and all the children are above average might be in order.

Simplehrguide

Simply speaking - GE does not use the A,B, C anymore. C players are not pushed to leave the company. It changed when Jack Welsh left GE. Today, GE is more employee friendly.

We have to keep in mind, A players usually do not work on a daily operation of the company, they set new ways of doing things. The company cannot survive without B players.

Even when you have the best team in the world - you can still divide your employees into A, B and C categories - if you benchmark them internally.

Dave

I recently left GE and worked in HR. The performance curve is gone and not for the better. GE has gone from one end of the continuum to the other end. It has been reflected in the poor stock performance. There is very little individual accountability in GE since Immelt became CEO.Poor performance is tolerated. Many of Immelt's current direct reports would have been exited from GE during welch's tenure.

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