General electric has an up-or-out policy, where key personnel in underperforming units are pressured to boost performance to acceptable levels and keep it there or risk being replaced. what is this an example of?

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Business

Ismael Dudley

14 October, 18:11

General electric has an up-or-out policy, where key personnel in underperforming units are pressured to boost performance to acceptable levels and keep it there or risk being replaced. what is this an example of?

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Thomas Castaneda · Answer 1

This is an example of Tying rewards and incentives directly to the achievement of strategic and financial targets.

By doing this, general Electric aimed to create an objective measurement for all of its emloyees that motivate them to keep increasing their performance if they hope to stay as an employee in that company. Through this method, Jack Welch managed to increase the company's value for around 4000% during 20 years of his reign.