I read an article yesterday where Jack Welch (of GE fame) was quoted as saying that every year an organisation should sack the bottom 10% of the organisation.

The article said little about how the 10% was determined.

Anyone out there support this theory ?

Difficult to say without reading the original article. Did it mention any criteria or just an arbitrary numbet of 10%.

Did he say with or without replacement?:)

No it didnt mention criteria - just a bland 'worst performers' statement.

The article wasnt talking about downsizing, so clearly re-hiring of 10% of the workforce would be required to maintain the status quo.

Jack Welsh has put his foot in it this time. What a crock! Has this guy never heard of Deming's Red Bead experiement?

Let's just suppose we get rid of the bottom 10%. For arguement's sake, we'll say we didn't replace them because we are trying to run lean.

Okay... 100 employees - *POOF* 10 are gone - C'ya, thanks for playing.

90 employees left. Next year rolls around - absolutely nothing has changed... for this little exercise, we are going to keep things constant. Those employees who WERE good enough to make it into the top 90 percent, now 9 find themselves - through no fault of their own (remember, nothing has changes - their work hasn't changed, their output hasn't changed, the tools they use to create the output hasn't changed) out on the street. *POOF*

81 employees left. Next year rolls around - absolutely nothing has changed... again... Now, those employees who were squarely in the middle 40% (okay - more towards the lower half of the middle - but in the middle none-the-less) find their heads on the chopping block. WHAT HAS CHANGED? Nothing!!! *POOF* 8 more employees gone. 27 employees in total gone - 17 of whom were good enough for the first cut but are now without a job.

Have I pointed out the tragic flaw in this logic yet? I haven't even begun to address what objective? criteria might be used to determine who is in the bottom 10%. The author of the article got close....

Anyone else wanna play with this one?

Jack is a foolish man. And for the record, he was quoted saying this many times and in many places. In interviews, he boasts of this tactic. What is worse, copycat executives see this/hear this and think that he must be right. Afterall, Wall Street practically touts him as the Second Coming.

Red Beads this man needs, but his arrogance will not allow him to find out he has been wrong. Jack has done more to set us back than to bring us forward with that type of logic.

Kevin:mad:

Michael,

Don't hold back, just speak your mind!!!!

Love it

:bigwave: :bigwave: :bigwave:

There is another danger: that fear of being in the bottom 10 per cent will encourage reluctance to stand out from the crowd. Company recruitment advertisements incessantly demand "out of the box thinking". But who is more likely to come up with innovative ideas? Is it the raucous group that discusses the same television programs every morning, drinks together every night and heads off en masse to play in the chairman's golf challenge each spring? Or are new ideas more likely to come from Joe in the corner, who does not say much, does not know a birdie from a bunker but can sort out all his software glitches without bothering the help desk? And who is more likely to be labeled a C?

To me, this sums it up. Unless you adapt and become "one of the boys", you're history. I once worked for company with 12,000 employees. At lunch time, all the Quality Engineers would take lunch with the boss and play cards, socialize, etc..I chose to enjoy my lunch at my desk. Having been in the Military, I have had enough eating with the masses. Another nuisance was having to listen to the Supervisor relate what he did over the weekend. Everybody would stop working and give him 100% attention. Me, being a "C", would keep working and occasionally nod my head to let him know that I was listening. Who cares what you did last night? Well, our first layoff consisted of 400 employees, with me being one of them. No other Quality Engineer was affected. It wasn't the Quality of work performed. It was because of preferring to act differently than the group. (Plus making more than any of them as a Senior QE) Overt fawning stifles individuality. Working for a company of 45 employees, with no apparent "C"'s, you are rewarded for keeping your nose to the grindstone and refraining from non productive "group" activities such as mentioned. Careful research is conducted before hiring. The "employment at will" policy in this state allows a company to discharge you any time without reason, so everybody understands that you must produce or you're gone. Mr Welch, in my opinion, should be thankful he has thousands of employees to turn on each other to determine who is an A,B, or C. Besides making for good reading, I don't think that there is a shred of proof that this 10% thing works. There are many reasons for success. Like lucrative contracts and politicians in your pocket.:vfunny: :ko: :smokin:

Unfortunately, this is more of a reality than you might think. Our company, in it's ultimate wisdom, plays this game a few weeks before Christmas. Has been for the last three years.
Don't want to go into it, but this last year two salaried people were singled out and poof...they were gone. No real reason given, just a slight adjustment in the amount of faces roaming the plant.
Meetings have already begun on the "list". I think they just flip a coin and too bad for you if it doesn't fall your way.


And they wonder why the hell nobody feels the need to do a good days work.

Originally posted by Al Dyer
Michael,

Don't hold back, just speak your mind!!!!

Love it

:bigwave: :bigwave: :bigwave:

Thanks Al!! I've NEVER been accused of not saying what I think... :vfunny: Especially if it's somthing I'm passionate about. :smokin:

BTW - great picture... it's so.... you... *smart@ssgrin*

Have a great one!!!

I forwarded the link to one of our VP's, one of the few I think deserves the title, and this was his response:
believe there is a thread of truth in Mr. Welch's ideas, but like anyone who blindly sticks by a single rule, this too will fail. Charles Darwin said (paraphrased), "It is not the strongest that survive, it is those most suited to reacting to change".

He apparently wasn't as startled as some of us QC Geeks were. :ko: :smokin:

How many here have either participated in a Red Bead Experiment or conducted one?

Kev

I just can’t pass this up. I’ve never read the article, yet I’ve been saying this for a number of years. The question is how is the bottom 10% determined? Based strictly on the “red bead” theory, there can be no bottom 10%! In the red bead experiment, (if my memory serves me correctly -- a rare occurrence) there was nothing that was in the operators/inspectors sphere of influence. If that is the case, then it would be not only unfair to can non-performers, but could very well be detrimental to the organization. But what if we could identify individuals that do not perform with items that are in their sphere of influence?

Lack of performance can only be attributed to one of two things, either a deficiency in knowledge, or a deficiency in execution. If the problem is lack of knowledge, then train! If the problem is execution, then find out why. If lack of performance is due to the individual, then cut ‘em loose!

Ten percent may be a bit much. I have a hard time thinking that any organization would have 10% dead weight. But the theory is of cutting dead weight is valid (IMNSHO). I do believe it is cruel to cut at the end of the year. My cuts would be late spring, or early summer.

You may now fire at will.

I guess Jack just measures the effectiveness of his resources and scraps 10%!

Has any one established the effectiveness of his programs and can correlate GMs success directly to them or is it Hype!

I know that alot of companies success is driven by wallstreet and what numbers they are shown per quarter and can have alot of muda between the numbers!


Deming: Inspection with the aim of finding the bad ones and throwing them out is too late, ineffective, costly. Quality comes not from inspection but from improvement of the process.

Does Jack throws out 10% by inspection?

Deming: People work in the system. Management creates the system.


Crosby: Everyone was to blame but no one was responsible.

To answer Kevin's question - I just did the Red Bead (Blue Marble, actually) on Tuesday night in class. Lot's of fun for me, not so much fun for my class, aka, Willing Workers. Poor souls, I'm good at playing the tyranical foreman who just had a healthy dose of MBO... *wickedgrinz*

db,

Sometimes you just have to let people go. If you've done everything within your power to ensure they succeed and they still fail, if the process is capable and they have been adequately trained and they still can't cut it, then there is something inherenty wrong with them. There is absolutely nothing wrong with this.

However I do have questions... :ko: ,
Cuts simply to reduce head count do what for the organization?
Do they increase productivity?
Do they increase quality?
Do they increase sales?
Do they increase customer satisfaction?

Cutting heads to add to the bottom line is an artificial accounting trick that may work for the balance sheets, but does nothing for the shop floor.

JMHO...

Cheers!!!

Kevin,

Dr. Deming came to Rochester on 2 occasions in the late 80's. He did a 4 day seminar at my company where he did the red bead, and spent additional days in our facility. One day I was part of a 10 person discussion group with him. I have a picture with him. It was definately a day to remember.

Greetings everyone!

Been a little busy lately, but this one really caught my attention.

How can anyone justify that exactly 10% of their workers are "below standard" every year. If that is the case, they obviously have about 85% more employees than they need and have no business sense, or they are just plain ignorant.

I am all for getting rid of people that do not meet the expectations...the operative phrase here is DO NOT. I have had to tell an occasional person that they are not working out. It's hard to do, and I give them every opportunity to improve before I tell them. We go through one-on-one remedial training, I'll sit down and try to find out what they want out of the job, as well as explain what I want from them and so forth. But, every now and then you just have to cut bait or fish.

But, to just set an arbitrary percentage and say you are going to get rid of that many every year is asinine. Not to mention the fact that it would become very difficult if not impossible to find good employees that would want to work for you. Talk about a rotten corporate culture!!!:mad:

IMHO, if you treat your employees well, give them the opportunity to grow, respect them and let them do their jobs you shouldn't have to worry about more than the isolated misfit that couldn't tie their shoelaces the same way twice no matter what you did to train them.

Y'all have a good day, keep up the faith!

Quote from Michael T:
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However I do have questions...,
Cuts simply to reduce head count do what for the organization?
Do they increase productivity?
Do they increase quality?
Do they increase sales?
Do they increase customer satisfaction?
--------------------------------------------

Nope! I would never suggest to cut, just to reduce headcount (even during a downturn). Cut who needs to be cut.

Quote from SteelMaiden:
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How can anyone justify that exactly 10% of their workers are "below standard" every year. If that is the case, they obviously have about 85% more employees than they need and have no business sense, or they are just plain ignorant.
----------------------------------------

I would like to submit that if an organization has 10% of workers “below standard”, then the 10% is probably executive management! Don’t get me wrong; each organization has 50% of employees below “average”, based on inhouse measurements. But, as you say, if it is every year, then management is at fault. Hmmm….. I think I’ve heard something like that before.

My comment is that organizations need to periodically review and eliminate any “dead weight” they have. Of course, that means my job may very well be in jeopardy.
:vfunny:

Other Dave,
Originally posted by db
[B Don’t get me wrong; each organization has 50% of employees below “average”, based on inhouse measurements. [/B]

50% may be below the inhouse average, but .... I submit this for consideration:

My inhouse average might be so far above the "standard of acceptance" that all of my employees are still way above the average in the industry, region etc, no?

There is no such thing as an "Average" person as far as I'm concerned. Average has no real meaning. And definitely in the workplace, I'm not looking for average, I want the cream of the crop.
:)

db

50% will always be below the average (or mean) 50% will also always be above - this is basic statistics, the question is where is your mean and what is your variance ?

Cant believe you quoted this statistical gaff !

I know it is ridiculous. I like to use it to show just how funny statistics can be. I know of a school district that had a fit when parents found out that only 50% of the students scored above average when compared to the rest of the school. They wanted everyone fired and plans in place to make sure all students scored above 50%. They could not understand when it was explained to them.

I was just being silly (my normal state). Forgive me.
:biglaugh:

Originally posted by SteelMaiden
There is no such thing as an "Average" person as far as I'm concerned. Average has no real meaning. And definitely in the workplace, I'm not looking for average, I want the cream of the crop.
:)

You betcha!!!

Average, above average, below average.... based upon what measurement and by whom?

It's just another easy out for upper management. Just like standardized testing (ACT, SAT, GMAT, GRE, LSAT, etc.)

Cheers!

This is the first time I have heard of this practice (removing the bottom 10%) from GE, but I have previously read a couple of articles mentioning the practice as it was performed at Enron. From the articles, it appeared that the employees were replaced with new hires without reducing headcount. Enron might have done better removing the top 10%.

In my opinion, people in general have unlimited potential when they have a common purpose and are willing to work for it. In most cases it is easier to motivate a current employee than to replace them. It's cheaper too.

Now a side note on statistics. 50% will always be below the average (or mean) 50% will also always be above - this is basic statistics, the question is where is your mean and what is your variance ? It is important to know what you are talking about when you use the word "average." 50% of the sample will always be below the median, but not necessarily the mean or the mode. It is rare when all three "averages" equal each other. Just basic statistics.

As usual I can't keep quiet for long. I think this program has a lot going for it. The problem is, just like everything else, the Big 3 guys got it backwards.

The way this thing works is not to cut the bottom 10%, but instead go out and recruit someone else's bottom 10%. This would benefit in the following ways:

1) It ensures corporate growth.
2) It improves the performance of your worst employees - they have moved up from the bottom 10% to the middle 70%.
3) It promotes morale as employees move up the line in performance.
4) Top employees from other companies will rush to join your company knowing they will be better than the employees under them and will no longer have to fear a cutback.
5) The community will benefit by a larger tax base.
6) Your forward thinking will be the talk of the business world.
7) The public will demand access to your product because of your employee/community relations.
8) You will be flooded with new business.
9) Your company will have to hire many more people.
10) Soon, your original work force will comprise only 20% of the total employees.
11) If you've done your homework, the original "poor" employees are now in the top 20% and you are the motivational genius who wins the Nobel for human relations.

What am I doing in Quality? Which way to the board room?

Dave

Nice one Dave.

I had a similar idea where the top 10% were sacked each year, and everyone else in the organisation moves up in rank and you hire a new 10% at the bottom.

This would be an excellant motivator as even the toilet cleaner could see that in say 10 years time he would be the CEO :vfunny:

I'm sure he would do no worse a job than JW.

How about instead of culling the bottom 10%, you just take the upper 10% and move them down to the bottom of the food chain. That way everyone in the company will eventually prove why they actually started at the bottom and never advanced.

Wonder how many would never make it back to the top?

Seriously though...

Demings red bead analogy doesnt demonstrate that the operator is never the problem, only that most problems are inherent in the system.

What if JW had devised a system to accurately distinguish those who were not performing statistically as part of the group.

He might then be justified in sacking them if it were not cost effective to re-train.

However I doubt he operates this sort of methodology.

Would this work, or would the fear factor take over ?

Fear will take over, and believe me, it does. I have spoken with three ex-GE folks who left on their own because of the Fear Factor. Fear leads to manipulation of numbers. When this happens, everyone loses. Only JW is gone, rich, and likely never to return. That is the good part, if you asked me.

Dr. Deming said in one of his last tapes that the System effects were as high as 98%. Given that scenario, JW would have cut 8% of Normal/Good workers. Sound like a fair plan?

Kev

Originally posted by Kevin Mader
Fear will take over, and believe me, it does. I have spoken with three ex-GE folks who left on their own because of the Fear Factor. Fear leads to manipulation of numbers. When this happens, everyone loses. Only JW is gone, rich, and likely never to return. That is the good part, if you asked me.


Right again, mon ami.

I have a very close friend who was formerly with GE.... corporate tax/accounting, etc. You wouldn't believe some of the things they do to "look" good. If you didn't get with the program... Well... you just weren't a team player.

Cheers!

Also see: Neutron Jack [Welch] - slash bottom 10% (http://elsmar.com/Forums/showthread.php?t=18769).