In General Electric’s 124 years of operation, the ways in
which employee performance is evaluated has hardly fluctuated. The employees
that shine are those who push the boundaries, whereas some are still wary of
taking risks out of fear of failure. To curb the uneasiness, GE is re-imagining
longstanding performance reviews and pay practices.
The effort is scheduled to be a multi-year project focusing
on a “nimble workforce” that can develop innovative products in a more
efficient manner. GE, whose corporate plan originally followed a disciplined,
data-driven approach and methodology for eliminating defects, now wants to give
room for error in the journey to better solutions.
GE Human Resources Executive Janice Semper, who has been
instrumental in the management overhaul, says it’s no longer realistic to
expect perfection in this industry and industries beyond. The pressure put on
employees to produce the same outcome free of error impedes the innovative
In late June, executives will come together to decide if
they will eliminate the process of rating employees from “role-model” to
“unsatisfactory” in a variety of categories. GE is also considering doing away
with approving annual raises on a strict schedule. Adding incentives managers
can offer to employees like time off to motivate and reward them will be
brought up for discussion as well.
The company’s performance reviews, formerly a long sequence
of formal write-ups and ratings by managers and employees alike, will take
months to re-engineer, but are designed to help workers improve faster. GE
wants managers to continue to check in with employees often and give them an
annual summary, rather than completely doing away with annual check-ins that
companies like Adobe Systems Inc. have.
The new style of measurement will be driven by the
companywide initiative FastWorks, a program intended to speed up product
development and analyze the wants and needs of customers before GE breaks
ground on new products. FastWorks contrasts sharply with GE’s old methods of
employee assessment, allowing for uncertainty and the prospect of gaining
understanding of how to better reach a solution.
Managers are encouraged to assess employees on their
consideration of customer needs, and how quickly they test and validate their
assumptions about potential products and solutions. The point is to reward
employees for asking questions, rather than just “being right.” GE also wants
employees to send each other – and even their superiors – praise and
suggestions through a mobile app, in person, or on the phone.
GE workers are finding the transition to accept self-doubt
and potential mistakes, along with the encouragement to give pointers to their
bosses, to be difficult. But, executives are hoping the unnatural feelings the
shift is causing will subside with time and further understanding.
Creating these new habits will take time, but ultimately the
new initiatives look promising for the future of GE. Internal improvements will
hope to translate to external improvements with current and future customers.
As GE continues to revamp and re-imagine their employee relations, other
companies with a similar business structure should take note of what could work
for them, too.