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Letter to BS: Jack Welch's contribution to HR management will be remembered

The performance appraisal system (2X2 Matrix) introduced by him made ethical grounding more important than outstanding performance

Business Standard 

Jack Welch
In GE he experimented with his concept of “boundaryless organisation” aiming to do away with internal functional silos and external barriers between the company and its customers and suppliers

Apropos the report “Wall Street darling, management guru who remade GE, dies at 84” (March 3), Jack Welch would also be remembered for his co­ntribution to the field of hu­man resource management. The performance appraisal sy­stem (2X2 Matrix) introdu­ced by him (which rates em­ployees on the basis of achieving corporate goals while adhering to the value system of the compa­nies) made ethical grounding more important than outsta­nding performan­ce. While an employee high in value but poor in performance would be retained and trained, the one with high performance but low in value would have to leave. He gave a push to the 360-de­gree feedback system by using it along with a Six Sigma quality programme to increase GE’s shareholder va­lue and em­plo­yed it to fire the bottom 10 per cent low-perfo­rming employees each year, thus reducing manpower by a third. He made this forced di­stri­bution of employee perfo­rmance (from outstanding to poor) in spite of murmurs of protest in and outside the organisation.

In GE he experimented with his concept of “boundaryless organisation” aiming to do away with internal functional silos and external barriers between the company and its customers and suppliers. For this “he initiated what became known as the GE Work-Out process — a series of structured and facilitated forums, bringing people together across levels, functions, and geographies to so­lve problems and make decisions in real time”. He was an advocate of proper succession planning and said that finding a capable successor would be his top most priority during his tenure.

Y G Chouksey, Pune


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First Published: Wed, March 04 2020. 21:35 IST
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