Workforce Differentiation

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Differentiation Framework July 13, 2013 Differentiation Framework The following paper contains a discussion of (1) Jack Welch’s differentiation framework, (2) A, B, C position categorization and (3) process that must be in place for successfully differentiating your workforce. Jack Welch’s 20-70-10 Differentiation Framework No other principle brings more controversy, and is more misunderstood than Jack Welch’s 20-70-10 differentiation framework. In a 2005 USA Today online interview posting, Jack Welch was asked if his view on differentiation had softened since having a heart attack and attending church more frequently, with the implication that differentiation is inherently amoral, even immoral. Quite the contrary, Jack insists…show more content…
Support or ‘B’ positions (1) support strategic positions and minimize downside risks, exhibit little performance variables and moderate to low discretion in work, (2) are compensated based on job level, (3) can cost the organization and destroy value if mistakes are made, and (4) mistakes in hiring are easily remedied through hiring of replacements. Surplus or ‘C’ positions (1) have little strategic impact even though they may be required for the firm to function and little to none discretion in work (2) are compensated based on market price, (3) mistakes in this position are not necessarily costly, and (4) mistakes in hiring are easily remedied through hiring of replacements. I prefer this approach for the following reasons: a. Increased awareness and focus on strategy and what must be done exceptionally well to win. b. Makes clear those positions that are not only strategic (A positions) but also have the potential to destroy value (B positions). c. Ensures efficient use of resources by making significant investments in the positions that provide the greatest opportunity for improvements in business performance. d. Ensures a disproportionate representation of ‘top talent’ or ‘A’ players in strategic positions where they add the most value in creating wealth. e. Ensures that HR’s primary responsibility and focus is the ‘advocacy and delivery of strategic talent’ and that investments in the workforce are based on strategic
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