Explain the forced ranking method using Jack Welch's "vitality curve." How successful is it as a performance management technique?

Question

What will be an ideal response?

Answer 1

Former General Electric chairman and CEO Jack Welch's "vitality curve" forces managers to rank all of their people into one of three categories: the top 20 percent (A players), the vital middle 70 percent (B players), or the bottom 10 percent (C players). The A players are thought to possess "the four Es of GE leadership" (very high energy levels, the ability to energize others around common goals, the edge to make tough yes-and-no decisions, and finally the ability to consistently execute and deliver on their promises). The B players are the focus of development. According to Welch, B players are the backbone of the company but lack the passion of As. The C players are employees who cannot get the job done and should be let go.

There are some important limitations to this system of performance management. For example, some believe the system is inherently unfair because it forces managers to give bad evaluations to employees who may be good performers, just to reach a pre-established percentage. Also, employees may become competitive with one another to avoid finding themselves in a lower category, or they may avoid stepping outside the bounds of routine task behaviors for fear of standing out or making a mistake. For these reasons, organizations today (including GE) have moved away from performance management systems that rely upon forced ranking of employees.