It seems as if time is finally catching up with GE.  For many decades, GE was held up as the doyen of effective business management and leadership.  Some of us who were a bit more skeptical had other ideas - evidence of this was their performance management with its "forced ranking" system.  Under the GE system (which has been adopted by some other companies), former Chief Executive Jack Welch required managers to divide talent into three groups -- a top 20%, a middle 70%, and a bottom 10% - many of whom were shown the door!

Critics suggest that such systems unfairly reward groups made up of stars and hinder collaboration and risk-taking - a growing concern for companies that are trying to innovate their way to growth.  

Two organisations who had adopted a similar system - Enron and their accountants, Arthur Anderson - are now no longer with us.

The latest news on GE, is that their accounting practices have been called into question.  Apparently, local finance people were "cooking the books" to ensure their targets were met.  This week, GE agreed to pay US$50 million to the Securities and Exchange Commission which said the company had fiddled the books to make the figures look good.

HR practices, particularly those that attempt to "systemize" management are doomed to failure and are likely to encourage behaviour such as was found at Enron and Arthur Anderson and now appears to be happening at GE. (You can see a good precis of the criticism of such systems in an article "The Struggle To Measure Performance - Rigid rankings hinder the teamwork and risk-taking necessary for innovation. But what combination of methods works best?"

Ultimately, there is no substitute for good management and leadership!

Service - another attempt at "Bribing people to perform"

The US airline industry, is the latest to try bribery as a way of getting their people to provide good customer service.  Delta and American Airlines have both recently introduced schemes aimed at improving customer service.  Both schemes are doomed for failure - see why at "Service with a smile!".

As I said before, with all people management practices, there is no substitute for good management and leadership.