Taking care of employees…by pushing them

I just finished reading this excellent article from last week’s BusinessWeek on William J. Conaty, GE’s head of Human Resources (HR). He offers insight that is appropriate for any company, of whatever size, open source or proprietary.

On measuring performance:

Relentlessly assessing and grading employees build organizational vitality and foster a true meritocracy, in Conaty’s view. Employees must be constantly judged, ranked, and rewarded or punished for their performance….[D]ifferentiation “is what still drives this company.” There’s nothing like a bit of anxiety and the knowledge that you’re being measured against peers to boost performance. “We want to create angst in the system,” he says. “We have evolved from being anal about what percent have to fall into each category. But you have to know who are the least effective people on your team—and then you have to do something about them.”

And on grooming people to replace you:

Great leaders develop great succession plans. Insecure leaders are intimidated by them. “I can go business by business and tell you where we’re strongest and weakest on succession. It all comes down to having an executive who doesn’t want to admit someone else could do their job,” says Conaty. “If they kill two or three viable successors along the way, you have to start looking at the person who’s doing the killing.” At GE, leaders are judged on the strength of their team and are rewarded for mentoring people throughout the organization. Conaty, for one, takes pride in the fact that his own successor is someone that he helped develop within the HR function at GE.

I’m not anywhere near perfect in these or other areas. But Conaty provides some important ways to get there.