PERFORMANCE RANKING, RETENTION, and DEVELOPMENT PROGRAM

Our technology, our great businesses, our reach and our resources aren't enough to make us the global best unless we always have the best people—people who are always stretching to become better. This requires rigorous discipline in evaluating, and total candor in dealing with, everyone in the organization. GE’s Annual Report 2000

PERFORMANCE, RANKING, DEVELOPMENT and RETENTION OBJECTIVES

lIdentify, develop and retain top 20% of employees including leadership group lRecognize the top 20% of Directors and VPs by creating the “MVP” Club

PERFORMANCE, RANKING, DEVELOPMENT and RETENTION OBJECTIVES l Identify, improve, or replace the bottom 10% of employees including leadership group l Eliminate Performance Appraisals and replace with Coaching and Career Development Planning Sessions

FIRST STEP - FORCED RANKING
l Management ranks their employees individually by similar titles or salary grades. For example, all Directors in one area are ranked by their Vice President. l Individual manager’s results integrated and validated across departments to create a consolidated forced ranking by title and/or grade throughout entire company. l Guidelines and spreadsheet provided to assist in ranking team (sample attached)

SAMPLE RANKING CRITERIA
l Employed at least 6 months (less than 6 are TNR - too new to rate) l Leads or lives by Principles of Conduct and MVPs l Overall leadership/employee competencies l % of Team players developed and promoted by leader l % of Turnover within leader’s group l Leaders Promotability l Sample ranking spreadsheet attached

Top 20% Leadership/Employee Development Program
l Specialized training l One-on-one coaching l Participate in crossfunctional “Black Belt” projects l Use as a separate planning group to report ideas back to senior management l Invited to luncheons with senior executives l Opportunities for cross training within organization l Semi-annual status report sent to VP, HR to monitor progress

MVP CLUB - Top 20% of Directors and VPs
l Fully paid deluxe l Special trip/cruise for two plaque/statue with MVP Club l Special designation leaders and on business card President/CEO “MVP Club 2001 l Attend off-site Excellence in strategic planning Leadership” meeting with senior management

MVP CLUB SELECTION CRITERIA
l Minimum of one year of service as a leader in the organization l Director or Vice President l Should be in top 20% of all VP’s and Directors in the organization l Senior Executive team approves final selection

Bottom 10% Development Program
l Design a plan for success/goals l One-on-one coaching to help identify areas needing improvement l Require attendance to training courses l Weekly or bi-weekly meetings with manager to monitor progress l If no improvement in performance, consider demotion/outplacement l Quarterly report to VP, HR to monitor progress

COACHING SESSIONS VS. PERFORMANCE APPRAISALS
l Eliminates time consuming mostly ineffective performance appraisals and replaces with positive annual career development/coaching sessions. l Team players complete own career development worksheet; manager meets and signs off; submits worksheet to HR for tracking. (sample attached) l Coaching session includes discussing career goals, growth potential, accomplishments, training needs, and overcoming career roadblocks. l Merit increases done separately through forced ranking matrix.

PROGRAM BENEFITS
l All initiatives will improve retention and build loyalty l Cost of turnover significantly higher than the expense of the MVP Club and other proposed training programs (recruitment fees, training, lost knowledge) l Increased retention by improving or transitioning out bottom 10% l Improve employee retention through coaching sessions versus performance appraisals.