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Jack Welch's 20 - 70 - 10 differentiation framework and A,B, C positions framework: What are the pro and cons of using one of them instead of other - Research Paper Example

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20-70-10 and A B C Positions framework are innovative and important frameworks to rank and yank the employees according to their skills and performance. The top 20% are considered as those who are high performers whereas 70% of the employees are those who work adequately and are…
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Jack Welchs 20 - 70 - 10 differentiation framework and A,B, C positions framework: What are the pro and cons of using one of them instead of other
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20-70-10 and A B C Positions framework are innovative and important frameworks to rank and yank the employees according to their skills and performance. The top 20% are considered as those who are high performers whereas 70% of the employees are those who work adequately and are considered as vital to the organization whereas rest of 10% are those who need to be released from the organization over the period of time. (Grote,64). The A B C Positions framework also places and ranks the employees according to various criteria set to identity as to who are good and most productive employees and who are actually not.
The overall pros and cons of both these frameworks, often used together, are described below:
1. 20-70-10 principle is valid and important in situations where there is generally a well-defined criterion for performance appraisal. Employees know that they will be appraised objectively based upon their true performance and not on other subjective criteria for evaluating their performance. (Boudreau and Ramstad,152)
2. A B C Positions framework however, can be more suitable in situations where it is expected that the employees will work hard to move up the ladder. It is generally perceived that bottom 10% of the employees are always to be fired however, players at C ranking can actually work hard to move upwards in the ranking rather than being fired.
3. In order to achieve a better fit between the employees and the skills required to accomplish tasks within the organization, the system of 20-70-10 is considered as more suitable as it gives managers and employees a clear understanding of what is required from them.
4. 20-70-10 is often considered as a system where favors are being showered on employees falling within top 20%. (The Wall Street Journal). In an environment where managers tend to be affected by the occasional good performance, this system may not work. As such, in order to effectively execute both these frameworks, a consistent approach to evaluate performance across all the functions shall be evaluated.
5. These frameworks can work in an environment where employees are already energetic as well as skilled. As such, a particular environment is required to identify the employees once equal opportunities are offered to all employees. This system however, may not work in an environment where significant bureaucracy exists and employees are hired for reasons other than their competence as well as skills. (Ovide and Feintzeig)
6. Cross utilization of employees may be relatively difficult in these frameworks i.e. an employee rated in bottom 10% or C player may find it difficult to transition to a new department if her skills are better fit with that department. For example, persons working in customer services department may be more suitable to the jobs in marketing department however; their ranking may prevent them from transitioning to a different department.
7. Firing bottom 10% and rewarding top 20% may not be possible given the fact that employee protection laws may not be favorable for employers across all environments. As such this system may work in an environment which is more conducive for employers with employees having limited bargaining power.
Works Cited
Boudreau, John W. and Peter M. Ramstad. Beyond HR: The New Science of Human Capital. Boston: Harvard Business Press, 2007.
Grote, Richard C. Forced Ranking: Making Performance Management Work. Boston: Harvard Business Press, 2005.
OVIDE, SHIRA and RACHEL FEINTZEIG. Microsoft Abandons Stack Ranking of Employees. 13 November 2013. 26 November 2013 .
The Wall Street Journal. Should I Rank My Employees? 2013. 26 November 2013 . Read More
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