Employee turnover, something we all are told we need to control in order to control, because if you have low turn over you have a happy work force. Not necessarily, you could just have a high paid unhappy work force. I like when the book talks about the efficiency loss because most people only think about the cost running the ad, interviewing and training, and they never consider the cost of a person that is not experience and will product less than the person that just left. Assigning a trainer to them is inefficient, double-checking their work is inefficient and fixing their mistakes is inefficient. All of these go directly to the bottom like and can be very costly to a company, and for those with tremendously high turnover you can never reach your true potential because you are always in the training mode.
So does this mean that all large successful companies focus on hiring and keeping good talent. Yes and No. As the example of GE
goes they expect and want to turn over 10% of their management every year. They do this for several reasons, first to insure that they always infuse the company with new talent and ideas, always have what they rate at the best employees in the chain and to eliminate low performers. Now I do not totally agree with the system but it has worked for them for a very long time and they do make billions every year. But as I was an insider there is a flaw in the system that does not seem to cause total failure but does cause the loss of good personal which is not its intended purpose. The Nine Block system is what they use, a three by three grid with the left axis (1 thru 3) being performance and the base axis (A thru C) being environmental and safety. So for and example a manager with a 1/A rating would be the highest, a 2/B would be average and any manager with a 3 or a C in the rating would be put on a 90 day improvement plan. Now if you have a 3/C your will be out of the plant within 30 days of notification of your score.
The issue lies in the forced ranking of the managers, because your whole future is reliant on your manager being aggressive, well spoken and tough enough to speak his mind and hold his own in the war room type setting were everyone is trying to talk up and support their own direct reports. If he or she is not then you and the other managers their team are in trouble, because this interaction is what your raises are based off as well as your future promotions and employment status. I have done this with my boss and other managers in our plant when ranking our hourly employees and it is a tough situation and there are several managers that do not have the gift of arguing a point that some people I know do and their employees suffer as a result.
Jeff, you have shared some valuable informtion that gives me a sense of mixed emotions. Rather the company refers to it as Nine Block, Right-Sizing, or Downsizing the results are the same, someone will be without a job. I fully understand the need for companies to make Downsizing decision if this is what will keep the organization profitable. What concerns be most about GE method is that the livelihood of their employees lies in ability of their superiors to articulate the employee's performance. I would not ever want the livelihood of myself or my family to be based on the ability or inability of another person to "sale" my performance. I feel that no one can "sale" me better than I could "sale" myself. Therefore I feel that the employee such be given a opportunity to present their case to the board. Just because a person is a manager or supervisor of another is not indictive of the manager knowing vital information about an employee. I say that to say this, not everyone that work in the capacity of a manager is really managerial material. Futhermore, those performance apprasials that every company feel is necessary to rank an employees performance are a joke. Most are opinionated with little if any factual documentation. We all know that opinions are just like rectal holes, everybody has one.
Posted by: dcarcole | July 15, 2007 at 12:37 PM
When the organization is facing loss,and sailing down from top to bottom,the managers have to wind up the business and start over again.
Posted by: Term Papers | February 12, 2010 at 05:04 AM
I do not totally agree with the system but it has worked for them for a very long time and they do make billions every year.
Luigi Hanway
Posted by: comprar online en estados unidos | June 12, 2010 at 07:58 AM