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Eliminating Bottom 10% Of Executives Strategy

Jack Welch, former CEO if General Electric, stated his passion for making people GE's core competency. He used a system in which executives in the bottom 10 percent of a forced performance ranking were eliminated.

- What do you think of this approach?
- How does it fit with a total quality philosophy?
- How would you respond to someone who says, "I think all of my people are pretty good, if I fire the bottom 10 percent that would just give me a new bottom 10 percent - Where does it end?"

Solution Preview

Jack Welch's approach to eliminate the bottom 10 percent of performers seems harsh to me. Everything in business is relative and can not be judged in the absolute. Certainly those team members who fail to perform should be eliminated. However, it is wrong to assign a number and draw a line in the sand. Consider the difference between those falling in ...

Solution Summary

This solution discusses Jack Welch's strategy of eliminating the bottom 10 percent of executives annually, and how this program fits with the total quality philosophy, as well as addressing challenges to the philosophy.

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