The Performance-Values Match Matrix (Jack Welch)
Have you ever wondered how employee performance can be aligned to core values?
Jack Welch, former CEO of General Electric (GE) once introduced the Performance-Values Matrix (also referred to as the Jack Welch Matrix
) which aligned employee performance with the core values match or culture fit of the organization (company).
In an attempt to enhance the performance levels and the values embracing among employees of General Electric (GE), Welch developed a simple but useful matrix named the Performance-Values Matrix. He used the matrix to classify and differentiate employees using 2 independent variables namely:
- Performance level. This refers to how employees achieve important results.
- Values match/Culture fit. This refers to how well employees embody and embrace the guiding principles which dictate the typical behavior(s) needed to be constantly displayed by them.
The matrix enables an effective employee performance appraisal system while also cultivating a corporate culture that encourages and rewards candor and performance. This matrix was one element helping GE to build a high performance culture that made the company such a successful entity within a relative short period.
The 4 sections of the Jack Welch Matrix
Welch was of the opinion that an effective employee performance appraisal system relies not only on proper employee feedback, but also on employee differentiation in terms of employee performance (results) and values match (behavioral/culture fit).
- LOW PERFORMANCE / LOW VALUES MATCH (Dysfunctional)
This quadrant consists of employees who have low performance in terms of delivering results and a low values match. Usually employees in this category do not get their job done. Most of them are complainers, incompetent and they hold the company back and impede its progress. Managers should consider moving them out, for they are not aligned to company expectations and they have the potential to negatively affect the morale of others.
- LOW PERFORMANCE / HIGH VALUES MATCH (Potential Stars)
This category comprises of employees who are a strong fit with the company values but they are not performing as per their job requirements. These are good employees who should be given a second chance and developed into stars through coaching and mentorship. Managers should consider giving these employees performance improvement plans, performance benchmarks, regular check-ins and ensure accountability.
- HIGH PERFORMANCE / LOW VALUES MATCH (Terrorists)
This is the most difficult group for managers. Although these employees depict behavior which is inconsistent with organizational culture and values, they do produce good/excellent results and they usually possess the right skills. They are giving managers a hard time to decide whether to do away with them or not. These employees are "culture killers", usually with a selfish attitude and not being team players. Most managers are hesitant to confront them in fear of losing them and the cost of replacing them. However regardless of them meeting their KPIs, managers should be willing to discourage their behavior and be courageous to mold them back into the organisational culture and otherwise dismiss them.
- HIGH PERFORMANCE / HIGH VALUES MATCH (Stars)
These employees embrace organisational culture and produce good/excellent results. These employees are the Stars and form the backbone of the organization and they the critical talent needed for long-term success of the organization. These people should be nurtured, rewarded and developed into future leaders. Managers should leverage on their ability, power of influence and credibility to foster and sustain a superb organisational culture in the long run.
Applicability of the Performance-Values Matrix
The Jack Welch matrix can also be implemented using a finer scale of 1-10 where 1 refers to low performance or a low values match and 10 as the highest performance or culture fit.
it can be employed in conjunction with Welch's 20-70-10 forced ranking system. Welch used the forced ranking system at GE that divided employees into three segments namely; the top 20% of performers, the middle 70% and the bottom 10% . The forced ranking system systematically manages out the bottom 10% of employees each year, advises the 70% to get into the top 20%, and rewards the successful top 20% of employees.
According to Welch, "People need to know where they stand... failing to differentiate among employees and holding them on to bottom-tier performers is actually the cruelest form of management there is."
⇨ Do you have experiences with the Welch model? Please share your comments on employee performance management…
Welch J. and Welch S. (2005), "Winning", Harper Collins
Aguinis A. (2009) "Performance Management" 2nd Ed, Upper Saddle River, NJ Pearson, Prentice Hall
Smither J.W. (2009) "Performance Management: Putting Research into Action", Jessey-bass