Why GE’s Talent-Review System’s Secret Ingredient is Still a Secret

Raghu Krishnamoorthy, a vice president at GE, recently wrote an HBR-Online article about GE’s secret ingredient to its purported Talent-Review System.  One can assume by reading the comments on the web that the most common takeaway from the article is that GE managers spend a lot of time with the employees being reviewed.   What the article did not give was many of the details about the system itself and maybe that is on purpose, since they want to keep the secret.  To paraphrase Alabama’s legendary football coach, Bear Bryant, when asked by Ga. Tech Coach Bobby Dodd why he didn’t tell coaches at football clinics what he really did, Bear said, “Why would I tell that to the competition?”

However, the secret as it was stated in the article “…lies in the intensity of the discussions about performance and values.”  What does intensity mean?  Yelling, and screaming?  You usually don’t call positive discussions intense.  Talking doesn’t change much behavior and a lot of talking doesn’t improve it very much.  The article didn’t say where most of the discussions take place.  I suspect they were in the boss’s office, in the break room or over lunch.  There was no mention of observing work behavior, which is by far the most valuable piece of data to evaluate and coach. Krishnamoorthy also says that it is not uncommon for a manager’s assessment and feedback to be questioned by his or her own manager.  In other words, the person who spends the most time with the evaluee is second guessed by his boss who at best can collect only a limited sample of interactions and thereby increases the rating error but whose opinions carry the most weight.

If it is not uncommon, it indicates that there is a problem in the rating system. While behaviorally speaking, there is much that can be approved with this system the thing that bothered me the most is the statement, “We continue to use a nine-block grid.”  It is only the best of managers who can make the grid a positive experience unless the person is rated in the top right-hand block. That is a “high potential, exceeding expectations.”  These grids wherever they are used, are subjective, divisive and competitive and in my opinion should not be used as the most they do is create unhealthy relationships.  GE announced publically that they had abandoned the “forced-ranking system” and this is better but not by much. With apologies to Mr. Krishnamoorthy, I understand that in an article of this length, it is difficult to detail all parts of this process and I may have come to some wrong conclusions about the process.  As they say, I only know what I read.  I did some work at GE many years ago and I am sure that my data are old.  However, this article did not have to be written but as written it sounds like GE’s secret ingredient is safe.  The fact that GE has produced some outstanding leaders will not be questioned by many.  I suggest that the process as presented in this article is not the secret and certainly not one to model after if you are trying to make employees as successful as they can be.