End of term report case study ge performance management

This led to the Performance Development PD project, led by Janice Semper, to create a new performance management system that would match FastWorks and help GE’s 190,000 employees work in

FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION

END OF TERM REPORT CASE STUDY: GE PERFORMANCE MANAGEMENT

Course Class

Lecturer

Group Student’s Name:

Lê Phú Danh Nguyễn Minh Ngọc

Lê Mạnh Đức

Đặng Quang Minh V6 Thanh Dat

Management : QTRE403(2425-2)GD.1.1 : Mr Ngo Quy Nham :10

Student ID:

2212250022

2212250071

2212340026

2214250608

2312790029

Hanoi, 10" April 2025

TABLE OF CONTENTS

2 CASE ANALYSIS Họ HH TT TH HT HH TH HT Tân hế 4

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1 CASE OVERVIEW

1.1 Overview of GE and Business Environment

General Electric (GE), a major global company working in industries like aviation, healthcare, and energy, faced big changes in the early 2010s The business world was getting more competitive, and GE needed to innovate faster to keep up CEO Jeff Immelt had a vision to make GE more agile and focused on customers, aiming to turn it into a

“digital industrial company” that could work quickly and meet customer needs To do this, GE adopted FastWorks, a method based on lean startup ideas, to help the company innovate and adapt rapidly But GE’s old Employee Management System (EMS) was too stiff and slow to support FastWorks’ flexible approach This led to the Performance Development (PD) project, led by Janice Semper, to create a new performance management system that would match FastWorks and help GE’s 190,000 employees work in a more agile way by 2016

1.2 Overview of GE’s EMS and FastWorks

The table below provides a high-level comparison of GE’s EMS and FastWorks:

(EMS)

Cultural Fit | Hierarchical, top-down management | Collaborative, feedback-driven

Table 1.1: Employee Management System & FastWorks

The EMS was a conventional performance management system rooted in annual evaluations and rankings, designed for a stable, hierarchical organization In contrast, FastWorks, inspired by lean startup principles, aimed to foster agility and innovation through iterative processes and customer-driven decisions This fundamental difference created a mismatch, as the EMS’s rigidity hindered GE’s ability to fully embrace

FastWorks’ dynamic approach, prompting the development of Performance Development (PD) to bridge the gap and align with GE’s new strategic direction by 2016

2 CASE ANALYSIS

2.1 FastWork's solutions to each problem of EMS

2.1.1 Strategic Alignment

a EMS Problems

Under the EMS, employees were rewarded for achieving fixed annual goals, with little room to adapt if objectives changed mid-year This rigidity stemmed from the system’s origins during GE’s Six Sigma era under Jack Welch, which prioritized operational efficiency over adaptability As GE evolved toward innovation and agility under Immelt, the fixed-goal structure became a misfit

b FastWorks Solutions

FastWorks addressed these issues by introducing a “pivot or persevere” framework based

on real-time customer feedback Using the build-measure-learn cycle, teams could test assumptions and change course quickly Regular customer engagement and rapid iteration were central to this approach

Touchpoints enabled ongoing conversations between employees and managers for coaching and feedback, replacing rigid reviews Employees could also share upward Insights These informal check-ins aligned individual efforts with broader company goals, focusing on learning metrics over fixed outcomes

2.1.2 Performance Measurement & Transparency

a EMS Problems

The EMS ratings system caused dissatisfaction Employees not rated at the top felt undervalued, while managers spent excessive time justifying ratings, which distracted from meaningful discussions about growth and development The system favored individual performance and penalized deviation from goals—even when adaptability was needed

b FastWorks Solutions

FastWorks eliminated ratings to foster transparency Managers received training on reward decision-making, and employees were given criteria to understand how rewards were determined Frequent Touchpoints helped managers stay in tune with employees’ contributions, making rewards more reflective of real-time impact

The focus shifted to learning metrics, like customer feedback on MVPs, rather than traditional business metrics Managers had bonus budgets and were guided by HR on how to distribute rewards fairly and strategically

2.1.3 Feedback Mechanisms

a EMS Problems

Feedback under EMS was limited to annual reviews, with optional mid-year check-ins rarely used There was little structure for peer or upward feedback, and what existed focused mainly on past performance, offering little for future growth The infrequency hindered responsiveness in a fast-changing environment

b Human-rooted Feedback Problems

Although real-time feedback was desired, many employees felt uncomfortable giving it, especially upward Fear of negative reactions and lack of clear guidance prevented open exchanges A safe and structured environment was needed to normalize feedback culture

c FastWorks Solutions

FastWorks introduced a continuous feedback culture through “Insights” that could be shared at any time A simple “Continues and Considers” framework guided constructive feedback It encouraged open, multidirectional exchanges among peers, managers, and subordinates

The PD@GE app allowed instant project-based feedback, while Team Touchpoints provided safe spaces for upward dialogue Making feedback non-anonymous encouraged accountability and follow-up, embedding feedback as a regular, trusted part of the work process

2.1.4 Process Efficiency

a EMS Problems

The EMS review process was time-consuming, with year-end evaluations taking up to three months The rigid annual cycle slowed feedback loops, and changes to goals required formal approvals, undermining agility

b FastWorks Solutions

Touchpoints offered flexible, as-needed dialogues throughout the year, replacing the burdensome review cycle These ongoing conversations made feedback and coaching timely and relevant

Instead of lengthy year-end reviews, employees submitted a concise one-page summary

in December With regular check-ins already in place, final discussions focused on future impact and development, not just past performance

2.2 Issues of GE's Performance Development

The case identifies three main issues with the implementation of the Performance Development (PD) system at GE: cultural resistance to giving insights, the removal of ratings, and differing generational receptions of PD

2.2.1 Cultural Resistance to Giving Insights

The case highlights that even after PD’s rollout, employees remained hesitant to give Insights, particularly Considers (constructive feedback), often opting for Continues (positive feedback) due to discomfort and fear of reactions Upward Insights to managers were particularly rare unless explicitly requested, indicating a persistent lack of trust and cultural readiness for open dialogue Despite PD’s aim to create a safe environment for feedback through initiatives like Team Touchpoints, employees still struggled to embrace the open feedback culture that PD sought to establish, reflecting deeper cultural barriers

HOw:

RELATES TO PERFORMANCE STANDARDS |

AMY EDMONDSON

within GE’s workforce

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Figure 2.1: Edmondson’s Psychological Safety Framework

Edmondson’s Psychological Safety framework explains this resistance, as employees need a safe environment to take interpersonal risks like giving honest feedback without fear of reprisal, which GE’s historically hierarchical culture struggled to fully provide even after PD’s implementation

-> Cultural resistance to giving Insights persisted due to a lack of psychological safety, undermining PD's goal of fostering an open feedback culture

2.2.2 Lack of Performance Rating

PD eliminated the EMS’s rating system, which continued to raise concerns among senior leaders because it removed an explicit way to assess and categorize employees based on performance The case notes that while managers were coached to use frequent Touchpoints to articulate performance for transparent reward decisions, and most employees understood their merit increases, senior leaders remained worried about the lack of a clear, structured assessment framework This shift made performance differentiation less straightforward, creating uncertainty about how to consistently evaluate and reward employees across the organization

CONTAMINATION AND DEFICIENCY OF A JOB PERFORMANCE MEASURE

Job Actual, or “true,”

performance job measure performance

Contamination Validity Deficiency

Figure 2.2: Contamination and Deficiency of Performance Measure

The removal of ratings in GE’s PD system raised concerns about performance measurement validity, which can be explained using the Contamination and Deficiency model This model highlights that an ideal performance measure should fully overlap

(contamination) or missing important aspects (deficiency) With the elimination of structured ratings, senior leaders perceived a loss of measurement validity—tfeedback became more subjective, potentially contaminated by manager bias or inconsistency, and deficient in capturing standardized performance outcomes across teams Although PD emphasized continuous feedback and development, the lack of a formal rating system meant there was no universally applied measure to anchor performance discussions, making it harder to differentiate high and low performers or support fair, consistent reward decisions

-> The removal of ratings in PD continued to concern senior leaders about the lack of an explicit assessment framework, despite efforts to ensure transparent reward processes

2.2.3 Different Generational Receptions of PD

The case reveals that even after PD’s rollout, generational differences i adoption remained a challenge—Millennials comfortably adopted the PD@GE app due to their familiarity with technology, while older generations preferred verbal feedback before recording Insights, being more cautious about what they documented Although GE emphasized that PD’s goal was dialogue, not just app usage, and allowed flexibility in how feedback was shared, this generational divide still influenced how the tool was adopted across the workforce, creating inconsistencies in engagement

-> Differing generational receptions of PD persisted, with Millennials embracing the app while older generations favored verbal feedback, impacting consistent adoption

3 RECOMMENDED SOLUTION

3.1 PM Integration Strategy

Chosen Strategy:

GE’s Job Crafting approach strengthens PD by aligning roles with employees’ strengths and goals, boosting motivation and engagement (Wrzesniewski & Dutton, 2001) Through strengths-based check-ins and project matching (Kristof-Brown et al., 2005), employees grow in ways that benefit both them and the company This supports PD’s vision of continuous development while maintaining fairness and intrinsic motivation (Deci & Ryan, 1985)

Action Plan:

Step 1: Facilitate Role Reshaping through Job Crafting

Workshops help employees identify core values and strengths, enabling proactive reshaping of tasks Conduct workshops to help employees identify their values and strengths, guiding them in modifying tasks accordingly

FIGURE |

A Model of Job Crafting

Motivations: Moderating variables lob crafting practices Specific ettects

General effects

Figure 3.1: Job Crafting Theory (Wrzesniewski & Dutton, 2001) Step 2: Integrate Individual Development Plans (LDPs) into Touchpoints

Managers use check-ins to discuss long-term personal and career goals Incorporate discussions about long-term personal growth objectives into performance evaluations Approach: Strengths-Based Development

Step 3: Enable Project Matching Based on Strengths

Use internal platforms to match employees with projects aligned to their passions and competencies Utilize internal platforms to match employees with projects that fit their competencies and interests

Step 4: Recognize Development Progress in Performance Discussions

Acknowledge capability growth, not just deliverables, to foster self-driven learning

Theory: Self-Determination Theory (Deci & Ryan, 1985)

3.2 Cultural Transformation Strategy

Chosen Strategy:

To embed a psychologically safe and feedback-driven culture, GE focused on cultivating

normalizing open dialogue through structured interventions

Action Plan:

Step 1: Train all staff in compassionate workplace behaviors

intelligence, and active listening to enhance interpersonal trust

Framework: Compassionate Leadership (West, 2020)

Additional Approach: Emotional Intelligence Competency Model (Goleman, 1998)

Step 2: Regularly assess and address psychological safety issues

Deploy psychological safety surveys team-wide, then implement localized actions to address root causes of low trust or fear-based silence

Model: SCARF Model (Rock, 2008);

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