What does Jack Welch (The legendary CEO of GE) and McKinsey have in common when it comes to managing talent? Both of them seem to agree on the same thing when it comes to managing talent within an organization. In order to build a great company you need to employ great people.
What actually are A , B and C graders ?
“A” grade employees are people that deliver beyond what they are expected to deliver. Look at your best designer, best programmer, best sales guy, best support technician or, look at the best people with the same level (i.e. having same designation), your best manager, your best project lead. – they are the “A” graders within your company. The people whom you truly consider your assets!
“B” grade employee are people who are consistent performers. They don’t do exceptional things but they are fairly consistent at what they are doing. According to Jack Welch – “They are on the fence”
“C” grade employees are poor performers who either cannot deliver results or require too much pushing.
Why can’t you hire “A” Grader directly?
The problem is that there is no sure shot technique that will guarantee that you will have all the “A” class guys working for you. There are not many of them around! Even if you can come up with an objective shortlisting process that can help identify a super-performer from an average-performer, meeting the numbers will be quite a challenge – specially if your company is growing at 100% every year. If you think that everybody who works for you is an “A” grade gut then you have simply not raised the bar high enough.
The good news is that hiring “B” grade performers is not that difficult and as it turns out, it is a better strategy too. There are following possibilities with a guy who is at “B” grade:
There is a real competition out there for hiring talent. McKinsey says that this “war for talent” requires a new way of thinking for attracting and retaining quality talent:
|Â||The Old Way||The New Way|
|Talent Mindset||HR is responsible for people management.||All managers â€“ starting with the CEO â€“ are accountable for strengthening their talent pool.|
|Employee Value Proposition||We provide good pay and benefits.||We shape our company, even our strategy, to appeal to talented people.|
|Recruiting||Recruiting is like purchasing.||Recruiting is like marketing.|
|Growing Leaders||We think development happens in training programs.||We fuel development through stretch jobs, coaching, and mentoring.|
|Differentiation||We treat everyone the same, and like to think that everyone is equally capable.||We affirm all our people, but invest differentially in our A, B, and C player|
So you are in a safe position as long as you have a process to recognize and reward the “A” grade people, attract, train and upgrade the “B” grade people and most importantly, identify and get rid of “C” grade employees.
Why getting rid of “C” grade people is important?
There are a lot of reasons why you should get rid of poor performers:
1. You stand for what you tolerate. If you tolerate incompetence then you and your organization stands for it.
2. There is lot of effort required inÂ converting “C” graders to “B” grade. At the same time remember that your “A” graders and “B” graders are spending their time on “C” graders. It’s like throwing an olympic swimmer into a pool with weights tied to his waist and then expecting him to win the race.Â I firmly believe that the results will be much better if a “A” grade employee spends time on “B” grade than on “C” grade.
How to avoid hiring “C” graders?
I think “C” graders are terrible at recruiting.Â If you believe, that a person is below average (either within the organization orÂ amongst peers) then that worst thing that you can do is let them hire other employees. So, you should only allow your best and brightest people to select future employees of the organization. Remember, no one can hire someone better than himself. So, while “A” graders will hire “B” graders, “B” and “C” graders will hire even more “C” graders.
Let’s begin the new year by cleaning up some deadwood. Shall we!?