Differentiation Framework

Powerful Essays
Executive Summary
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.

Introduction
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.

You May Also Find These Documents Helpful

  • Better Essays

    Workforce Differentiation

    • 1163 Words
    • 5 Pages

    The following paper contains a discussion of (1) Jack Welch’s differentiation framework, (2) A, B, C position categorization and (3) process that must be in place for successfully differentiating your workforce.…

    • 1163 Words
    • 5 Pages
    Better Essays
  • Good Essays

    20-70-10 vs. a-B-C

    • 851 Words
    • 4 Pages

    Discuss the strengths, pitfalls, and underlying assumptions of differentiating employees in the manner suggested in Jack Welch’s 20-70-10 framework.…

    • 851 Words
    • 4 Pages
    Good Essays
  • Better Essays

    Rajan, A., & Harris, S. (2003, September 2). The Business Impact of Diversity. Personnel Today. p18.…

    • 1275 Words
    • 6 Pages
    Better Essays
  • Good Essays

    Diversity In The Workplace

    • 1117 Words
    • 5 Pages

    145). Intensive training is required in an organization with a pool of talents originating from different backgrounds as a way of harmonizing the internal environment of an organization for better performances. Work diversity just as change is inevitable cannot be ignored. Organizations have the mandate to lay down proper assessment methodologies, which will help in determining the satisfactory levels originating from diversity in employees base. Proper reporting standards, which ensure that all the key stakeholders in a diverse organization are represented usually, need to be given a key priority. Any work being performed has to be measurable and proper reporting ensures that the different work set-ups are well coordinated as a method of developing them to actualization…

    • 1117 Words
    • 5 Pages
    Good Essays
  • Good Essays

    It is important for managers to be educated on diversity, and have an understanding of the differences in their workforce’s population, because it will improve performance potential and increase employee satisfaction. There are numerous benefits to valuing diversity. With each unique combination of gender, ethnic background, culture, and life experiences, each person brings a different set of strengths, skill sets, and approaches to problems. According to Bell, (2007) , “Valuing diversity can benefit organizations in the areas of cost, resource acquisition, marketing, creativity, problem solving, and system flexibility”. An employee’s satisfaction is much higher when they feel accepted and valued for their unique qualities.…

    • 1059 Words
    • 5 Pages
    Good Essays
  • Good Essays

    master

    • 3334 Words
    • 14 Pages

    If we value and promote equality and diversity, we will recognise the strengths of differences between individuals. This will give great advantage in terms of flexibility, employee motivation and employer satisfaction.…

    • 3334 Words
    • 14 Pages
    Good Essays
  • Good Essays

    Team Diversity Paper

    • 947 Words
    • 4 Pages

    "Our difference is our strength (Cyber Trader, 2003)." As a team we strive to have an open and supportive teamwork environment. This benefits the team and helps us better to easily get things done. We are all open-minded when it comes to values and cultural backgrounds. Things like gender, ethnicity, race, sexual orientation, age and physical challenges do not affect our working abilities.…

    • 947 Words
    • 4 Pages
    Good Essays
  • Better Essays

    The general function of performance management systems in organizations is for employers to manage employees’ performance and development by providing individual feedback on their performance evaluation to identify and plan measurable areas for personal development to ensure the organization’s strategic goals are being met (DeCenzo and Robbins, 2007). For years, many organizations provided appraisal type performance reviews to their employees that ranked them against other employees. This type of ranking system is problematic, as it is unfair to compare employees from different departments who’s primary goals may be different from one another and can viewed as putting down employees who may be unable to put in as many hours or as much effort as others who have only one set project at a time and can bog down to set higher numbers. If employee development is not properly measured and managed, the organization may find it difficult to meet their strategic goals. This in turn can create complications between mainstream workers and management, as well as the company, and their customers.…

    • 1442 Words
    • 6 Pages
    Better Essays
  • Good Essays

    Every organization can have a successful employee performance appraisal system, it is important as managing your financial resources. Employee performance can have a profound effect on both financial and program components to any organization. Managers have to identify what the organizations goal are and how they can be accomplished, communicate these goals with all individuals make the goals clear and precise. Use these performances as a basis for appropriate personnel actions including rewarding performances and if need what action to improve less then successful performances. The Office of Personnel Management defines this process as:…

    • 854 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Siegel Case Summary

    • 775 Words
    • 4 Pages

    Such systems often include the use of rating or ranking levels in which each employee is positioned. These systems often use quotas to place a part of top performers at the peak level and the worst performers at the bottom level. Such a system is considered to eradicate those within the organization who constantly perform below par. The system is able to work if employees are mindful of the standards for which they are graded in advance, so they can make the required modifications. It can also remove those inside the organization who are either not appropriate for precise jobs or simply lack the skills and abilities to execute their jobs efficiently (Myers,…

    • 775 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Individual Difference

    • 757 Words
    • 4 Pages

    Describe types of individual difference that can be used to evaluate employees of your selected organization.…

    • 757 Words
    • 4 Pages
    Good Essays
  • Good Essays

    This case takes a critical look at using comparative methods to review and evaluate employees and exposes the impact of those methods on productivity and morale. "Forced Ranking" had occurred for many years at GE, instigated by the famed ex-CEO Jack Welch who had managers categorize their reports into three categories: the top 20 percent, the middle 70 percent, and the bottom 10 percent. This process has been shown to work well for about two years because it eliminates the least productive workers and strengthens the core team. After two years the benefits decline since the core team has now become stronger and eliminating the weakest links are no longer critical. After two years, the cut-throat mentality starts to take hold and employees know that they must portray themselves in the best possible light while playing up any negative factors about coworkers to help reinforce their positions. This behavior discourages innovation and leads to infighting as well as avoidance to risks which stagnates the company from growth and new ideas. This case goes on to look at best practices and techniques used by Yahoo who "made substantial changes to its rating system which compared employees' performance to an absolute standard rather to each other" (Ivancevich, Kinopaske, Matteson, 2008, p.135)…

    • 692 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Stack Ranking my view

    • 764 Words
    • 2 Pages

    Stacking Ranking, some time referred as “ranking and yanking” system, has been widely adopted by many companies in some forms as companies need a way to fairly evaluate their employees and have a structured system for compensation difference. This is especially necessary to avoid lawsuit on discrimination and reduce corporation’s legal risks when it comes to firing employees.…

    • 764 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Otd Case Study

    • 914 Words
    • 4 Pages

    Q2) Do management information systems, such as the one at Mrs. Field’s, alter the conclusion that large size leads to increased vertical differentiation, formalization…

    • 914 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Sources of conflict

    • 591 Words
    • 3 Pages

    From the book, Chapter 7 Managing Conflict, conflict can come from many sources. Personal differences are common because individuals bring different backgrounds to their roles in organizations. This observation is particularly relevant for managers working in an organizational environment characterized by broad demographic diversity.…

    • 591 Words
    • 3 Pages
    Satisfactory Essays