How GE ditched the appraisal – and the traditional L&D role

Author: Robert Jeffery | Date: 16 Nov 2016

Dubai HR Summit 2016: why an engineering giant needed to rethink its processes and mindsets in a digital-first environment

Of the 12 companies that launched the Dow Jones Index in 1885, only one is still in existence today. But keeping General Electric (GE) at the top of the industrial pile in a business landscape that would be unrecognisable to its founders has meant making some increasingly tough decisions around HR and L&D.
 
Speaking at the Dubai HR Summit, Tim Highet – the 300,000-strong business’s regional manager for customer leadership learning – sketched a compelling portrait of a “cumbersome” business that was learning to become more agile by being prepared to rethink its own legacy.
 
The business, said Highet, was now determinedly digital-first – a fact embodied by the requirement that all new employees learn to write code, as well as an emphasis on escalating decision-making to a local level and loosening formal hierarchies (“We consider everyone a leader because we consider ourselves a meritocracy”).
 
But reaching that point has involved both investment and a mindset shift, particularly in L&D. “Our L&D function owns culture,” said Highet. “We are not a deliverer of courses. We do offer courses, but that’s not what we’re about. We build leaders and instil beliefs.”
 
The importance of L&D is embodied in the concept of Crotonville – both the name of a physical training centre near New York and a broader mentality that enables the business to train 50,000 people a year in 200 locations.
 
But change has to be lived beyond learning, and GE’s HR team has a set of values it says are both long-standing and making a genuine difference to everyday operations. Highet expressed scepticism about the concept of values for their own sake, but said the idea that “customers define our success” – one of GE’s core values – was an example of something that truly resonated: “A lot of people don’t make the connection between keeping customers happy and getting their pay cheque.”
 
And GE is happy for its values to be explicitly focused: the business talks, for example, about the need to deliver results. “There will always be a reason why someone can’t deliver, but we ask them to try harder,” said Highet.
 
HR has been one of the driving forces behind the firm’s ‘FastWorks’ mentality, which accelerates processes and gets customers involved in delivery, ending the quest for perfection in favour of iteration.
 
Most intriguingly of all, however, the business that gave its name to the most intense form of performance management has now changed its mind on the idea. “We have officially killed the appraisal,” said Highet. “We have ongoing, intelligent discussions, and at the end of the year you can pick up on some of those conversations and tie them together. It’s looser, more flexible, but you have to have a hard rigour behind it.”
 
And as part of that, the concept of ranking has also had its day: “If you’re talking about ongoing development priorities, why would you give me a [single] number? It destroys the good conversations you could be having with your manager.”