The Secret Ingredient in GE's Talent-Review System
GE is often highlighted as an organization that develops some of the most effective leaders. Most companies have a version of the talent-review system we use at GE. But judging from what I hear from managers of companies that visit us to benchmark our system, the difference between our approach and theirs does not lie in forms, rankings, tools, or technologies. It lies in the intensity of the discussion about performance and values. The debate, the dialogue, and the time taken to have an exhaustive view of an individual − evaluating them based on both what they accomplish and how they lead − are far more important than any of the mechanics. The heart of our system has always been about the enormous time commitment the organization and the leadership devote to the conversation about people.
As the custodian of the talent-review process, I have been lucky to observe this at close quarters. Here is what I've learned.
It starts with the attention given to the individual appraisal. Managers are expected to dedicate time to prepare for a detailed discussion of a direct report's performance and values, strengths, development needs, and development plans. Most employees spend over 1,800 hours a year working for the manager and the company. Is it unreasonable to expect the manager to spend at least a few hours thinking about and discussing the performance appraisal as part of a larger commitment to helping the employee be more successful? (More about that in a moment.) Individual appraisals are considered enormous opportunities for the candid, constructive conversations that employees deserve.
It is not uncommon for a manager's assessment and feedback to be questioned by his or her own manager, if the commentary does not appear to reflect the individual accurately. I have seen our top leaders return an appraisal because it did not do justice to the feedback on the individual. Such a disconnect is the worst thing that can happen because it is a reflection of the manager, or the HR manager, as much as it is of the employee. This practice of multi-level engagement ensures that the quality of the appraisal is honest and comprehensive.
We continue to use a nine-block grid with quadrants that capture levels of performance and values not as a means of a forced ranking but as a way of facilitating differentiation. Here is how it is done. As our businesses and functions go through the process, the leaders justify the positioning of talent in different quadrants of the grid. The system allows us to link the grid straight to the appraisal. The chairman sets the overall tone and expectations, and leaders across the company make suggestions, comments, and additions to the feedback. While each leader may only have visibility into his or her particular business, the system ensures consistency and provides a consistent view and assessment of talent across the company.
Most of our leaders, including the chairman, spend at least 30% of their time on people-related issues. It's part of our operating rhythm. These discussions are rich in making calls on leadership, succession, opportunities for development, organization and talent strategy, diversity, and global talent builds. The discussions also afford us the opportunity to assess performance more closely and holistically − including market factors, internal factors, organizational complexity, and risk elements. More importantly, it is the business leaders who take the lead on these discussions, not the HR person. This is consistent with our philosophy that talent development and assessment is a key business agenda, not just an HR activity.
Some skills are more important than others to be a great leader. As I have observed these discussions, some of the patterns are becoming increasingly obvious to me. For instance, the difference between a great leader and a good one is not just about intellectual capacity; it is often about judgment and decision-making. Likewise, a hunger to win, tenacity, customer advocacy, and resourcefulness can trump some of the skills we often look for − analytical skills, for instance. Such traits are best unearthed through discussions and become important considerations for future talent mapping.
Effective talent review is an intensely human process that calls for extensive demands on a leadership's time. There are no formulas or equations. The power lies in giving people the attention, candid feedback and mentoring they deserve through a company-wide commitment to human-capital development.
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