Differentiating Framework

[Name of the Professor]

[Date of Submission]

Differentiating Framework

Introduction

Human resource plays a vital role in any company's success. Successful companies ensure better management of their employees and lead them in an effective way. One of the best approaches given by Jack Welch, in his book 'Winning', is 'Differentiation'. According to this framework, leaders need to allocate resources keeping in mind the highest payback and employees who are giving highest return should be differentiated and recognized from those who are just the expense for a company and are at the bottom. Differentiation is an effective and an efficient way to run your company and it is the fairest way which ultimately makes winners out of everyone (www.frrl.wordpress.com).

Discussion

Strengths, pitfalls, and underlying assumptions of differentiating employees in the manner suggested in Jack Welch's frameworks

Underlying Assumptions

Differentiation is about people, it is a way to manage employees and business. According to Jack Welch's differentiation approach, a company has two parts: hardware and software. Hardware is defined as different businesses or product lines of large and small companies. Software is described as the human resource of a company. It is important to identify which business a company wants to invest money, so that it won't invest money into failing business. The basic assumption behind this approach is that managers should identify their employees according to their performance and categories them as top 20%, middle 70%, and bottom 10% performers (Wyld, 2011). Differentiation is important to evaluate employees, as it identifies toper, mediocre, and bottom performers and helps managers in applying different tactics for leading each category. (www.frrl.wordpress.com).

When managers apply differentiation approach in reality, not just in their mind, the top 20 percent of employees get rewards and recognition for their pockets and soul in the form of bonuses, stocks, training, praise, and love. They must be treated in the best way as they are the stars of the company (www.frrl.wordpress.com).

The mediocre 70 percent should be managed differently. These middle performers are important for a company, as they have skills, energy and commitment to move forward. They are the majority, 70 percent, therefore company needs to engage them and motivate them to progress towards top performers. Here, there is a great need of effective management, as they are in majority, the great challenge and risk lies here. It is necessary to train them, positive feedback, and the thoughtful goal setting. Employees fall in this category should be move around among the business so that their experience and knowledge can be increased. It can also enhance their leadership skills in a better way. Differentiation approach need managers to categories the middle 70, identify employees with potential to move up as top performers, and cultivate each one of them. As they are the majority, company cannot lose them and should try to keep them out of bottom 10. Every one of the middle category should be motivated and feel that they truly belong to the company (www.frrl.wordpress.com).

After that comes the bottom 10 percent, for them differentiation ...