The case "Performance Development at GE" outlines GE's efforts to overhaul its performance

management system by introducing a new approach called PD@GE. This initiative was
spearheaded by Janice Semper and her team, who aimed to shift the company culture towards
more continuous feedback and development, moving away from the traditional annual review
and rating systems.

Key Points of the Case:

1. Initial Challenges: Despite creating an app for real-time feedback, the team
discovered that employees were uncomfortable with the idea of giving feedback,
especially to their managers. This discomfort stemmed from cultural norms and fear
of negative reactions.
2. Reframing Feedback: To address these issues, GE introduced new terminology, such
as "insights" instead of "feedback," and shifted from fixed annual goals to more
flexible "priorities." This was intended to create a more positive and constructive
approach to employee development.
3. New Annual Review Process: The traditional annual review was replaced with
continuous "Touchpoints" throughout the year, where employees and managers could
have ongoing discussions about progress and development. This approach was more
dynamic and focused on long-term growth rather than a single, annual assessment.
4. Elimination of Ratings: A significant change was the removal of employee ratings.
This decision was driven by the recognition that ratings often caused distraction and
dissatisfaction among employees. Instead, managers were trained to provide more
meaningful and personalized feedback without the constraints of a rating system.
5. PD@GE App: The new system was supported by a mobile app that allowed
employees to track their priorities, record touchpoints, and give or receive insights.
The app also provided metrics and analytics to help GE understand organizational
trends and areas for improvement.
6. Cultural Shift: Implementing PD@GE required a cultural transformation within GE.
The staggered rollout allowed for continuous improvement and adaptation, with
different regions and business units embracing the changes at their own pace. The
success of the system depended on fostering an environment where open and honest
feedback was encouraged.
7. Reception and Challenges: While the new system was well-received by many,
particularly Millennials, there were challenges related to cultural differences and
varying comfort levels with giving feedback. The success of PD@GE depended on
creating a safe and supportive environment where employees felt comfortable
engaging in this new approach to performance development.

Analysis: The case illustrates a comprehensive attempt by GE to modernize its performance

management system, focusing on continuous development rather than static evaluations. The
key takeaway is the importance of aligning performance management practices with the
company culture and employee expectations. While the new system offered many benefits,
such as increased flexibility and a focus on growth, it also highlighted the challenges of
changing deep-seated cultural norms within a large organization.

This initiative shows the potential for performance management systems to evolve beyond
traditional methods, but also underscores the need for careful implementation and support to
ensure employee buy-in and long-term success.
Several issues and challenges arise from the "Performance Development at GE" case:

1. Cultural Resistance to Feedback:

• Issue: Employees were uncomfortable with the idea of giving feedback, especially to
their managers, due to cultural norms and fear of negative repercussions.
• Impact: This resistance hindered the effectiveness of the new system, as open and
honest feedback is crucial for continuous development.

2. Terminology Confusion:

• Issue: The introduction of new terms like "insights" instead of "feedback" might have
caused confusion or may not have fully addressed the underlying discomfort
employees felt about feedback.
• Impact: This renaming might not fully resolve the issue if the cultural or
psychological barriers to giving and receiving feedback remain unaddressed.

3. Elimination of Ratings:

• Issue: Removing the traditional rating system, while innovative, might lead to a lack
of clear benchmarks for employee performance, making it difficult to distinguish high
performers from others.
• Impact: This could potentially demotivate top performers who previously relied on
ratings for recognition and could also complicate compensation and promotion
decisions.

4. Inconsistent Adoption Across the Company:

• Issue: The staggered rollout and varying adoption rates across different regions and
business units led to inconsistencies in how the new system was implemented.
• Impact: This inconsistency could create confusion among employees and managers,
leading to disparities in performance evaluations and development opportunities
across the company.

5. Over-reliance on Technology:

• Issue: The PD@GE app, while a useful tool, might have led to an over-reliance on
technology, potentially reducing the emphasis on face-to-face interactions and
meaningful conversations.
• Impact: This could diminish the quality of feedback and the personal connection
between employees and managers, which is essential for effective development.

6. Challenges in Measuring Success:

• Issue: Without traditional ratings and with the focus shifting to continuous
development, it may be difficult to measure the success of the new system and the
overall performance of employees.
• Impact: This could lead to difficulties in tracking progress, identifying top talent, and
ensuring that all employees are developing effectively.
7. Possible Resistance from Managers:

• Issue: Managers, who were used to the traditional annual review system, might resist
the new approach due to the increased time and effort required for continuous
feedback and development.
• Impact: This resistance could undermine the effectiveness of the new system, as
managers play a crucial role in driving performance development.

8. Employee Perception of Fairness:

• Issue: The elimination of ratings and the shift to a more subjective system of feedback
could lead to perceptions of unfairness, particularly if employees feel that they are not
receiving the recognition or rewards they deserve.
• Impact: This could result in decreased motivation, engagement, and trust in the
performance management process.

These issues highlight the complexities involved in overhauling a performance management

system, especially in a large and culturally diverse organization like GE. While the new
approach offers several potential benefits, careful attention to these challenges is necessary to
ensure the system's success