There’s an insightful story Jack Welch often told about a formative moment early in his career at GE. He was part of a graduate program with a cohort of new hires – a mix of people who worked hard and carried their weight, and others who clearly did not.
During performance review time, he learned that everyone in the program was being given the same raise.
He was furious because he knew who in the group was doing exceptional work and who wasn’t. Everyone did. As he put it, “Kids in any class know who the best students are.”
Effort and performance aren’t as subjective as we sometimes pretend.
That moment shaped him. It became the seed for his later, legendary emphasis on meritocracy at GE – including the (controversial) forced ranking system where the bottom 10% were consistently shown the door.
Agree or disagree with the method, the underlying principle he lived by was clear: When you reward strong performance, people rise to the standard. And when you tolerate weak performance – or worse, reward it – you destroy accountability.
And when accountability disappears, the people who thrive on it leave.
In many ways, that is the beginning of the end for any high-performing team or organization.
