The purpose of this document is to present and discuss the strengths, pitfalls, and underlying assumptions of differentiating employees in the manner suggested in Jack Welch’s framework. The document will also present a framework I would use to assess my employees, why I will use it, and how it will be used to differentiate them. Finally, this document will discuss the values, cultural elements, and organizational processes that must be in place for differentiation of employees to be equitable and productive.
Differentiation is one of the topics discuss by Jack Welch that is really polarizing. Some people love it, use it in their organizations and discuss it as the root of their success. Others hate it; using all kinds of epithets and going as far as describing it as “cruel and Darwinian” . There is no question differentiation is a divisive topic.
But a lot of the divisiveness associated with the framework is rooted in the misunderstanding and the confusion about what differentiation really is, how to implement it, and the elements and values that must precede the implementation of the framework for it to be successful. Jack Welch even acknowledges he should have discussed the topic of differentiation at more length in his first book and not doing so was a mistake
The 20-70-10 Differentiation Framework
The 20-70-10 differentiation framework presented by Jack Welch is based on the premise that the team who fields the best players wins. It is important to understand that differentiation to work it has to be built on top of a culture candor and trust. Without this as the core of an organization’s culture, differentiation will be difficult, if not impossible to implement.
This framework implements a process that requires managers to rank their employee performances into three categories; the top 20 percent, the middle 70 percent and the bottom 10 percent. It also requires managers to act on this performance rankings
References: Lencioni, P. (2002). The Five Dysfunctions of a Team. San Francisco: Jossey-Bass. Welch, J. W. (2006, October 1). The case for-20-70-10 - Buinessweek. Retrieved October 10, 2013, from BusinessWeek: http://www.businessweek.com/stories/2006-10-01/the-case-for-20-70-10 Welch, J., & Welch, S. (2005). Winning. New York: HarperBusiness.