.Organization Behavior and Theory GE and
Superado Questions
GE Case
1. To what degree do the policies, practices, and reward systems at GE result in
▪ Expectancy?
▪ Instrumentality?
▪ Valence?
When Jack Welch started at General Electric in 1960 as a chemical engineer, he found
that the bureaucracy at GE was frustrating. Everything he wanted to do, he had to ask his boss,
who would ask his boss, and so up the chain and then the answer would trickle down the same
way. Luckily, his boss at the time had convinced him to stay, and he ended up moving to
leadership very quickly and was the youngest VP in 1972 and later, in 1981, became the CEO.
Since he had had those experiences with the bureaucracy early on his career and saw how
unsuccessful it was; he was able to make it part of GE’s and his own vision.
Early on, he started getting to the meat of it and finding where wastes could be cut and
did so. After cutting the waste, he wanted a way to change the culture in a way that would make
employees feel closer to the outcome. Jack created a small company culture so that all of his
employees could be engaged and feel like they had a voice in the decisions that were affecting
them. Giving employees a voice and making sure that he had the right leaders in the right places,
he opened the “line of sight” to the employees. They did not have to cut through all the red tape
when they had an idea, nor did they have to wait for a quarterly or annual update to know how
their business unit was doing based on their performance.
, .Organization Behavior and Theory GE and
Superado Questions
Motivation is the combination of expectancy, instrumentality, and valence. With the larger
“line of sight”, Welch was able to expect more out of his employees and they understood what
job they were expected to do and how to do it. They understood exactly what needed to be done,
so additional effort also meant higher performance which would not happen if the employee did
not see the vision. Next, it is desired to be rewarded for what you do. In GE’s case, they
enforced a forced ranking system that allowed them to know who those top people were and
more importantly, who the bottom people were. With the model to release the bottom 10%
every year, employees understood that their performance was directly tied to their job,
promotions, and raises. Lastly, they valued this as important, of course they wanted to keep
their job, but on top of that they wanted to be better than they are so that way they still can move
up in the company and take on new experiences.
2. What behavior does the incentive system reinforce?
▪ Is this behavior in accordance with GE’s culture?
The incentive system at GE promotes collaborative behaviors of idea-seeking and sharing,
rather than just individual idea creation. This system emphasizes GE’s focus on striving for
stretch targets, but it does not replace the objective of hitting basic targets. The major effort with
the new incentive system is to create an environment where people can be their best. While
employees are not held accountable for failing to reach the stretch goals, the goals are used as a
motivating tool to push them to be better than they thought they could be. If these goals are
attained, the rewards are substantial. Welch wanted to create culture that instilled self-
confidence, and that’s exactly what the incentive system encouraged. The objective was to
Superado Questions
GE Case
1. To what degree do the policies, practices, and reward systems at GE result in
▪ Expectancy?
▪ Instrumentality?
▪ Valence?
When Jack Welch started at General Electric in 1960 as a chemical engineer, he found
that the bureaucracy at GE was frustrating. Everything he wanted to do, he had to ask his boss,
who would ask his boss, and so up the chain and then the answer would trickle down the same
way. Luckily, his boss at the time had convinced him to stay, and he ended up moving to
leadership very quickly and was the youngest VP in 1972 and later, in 1981, became the CEO.
Since he had had those experiences with the bureaucracy early on his career and saw how
unsuccessful it was; he was able to make it part of GE’s and his own vision.
Early on, he started getting to the meat of it and finding where wastes could be cut and
did so. After cutting the waste, he wanted a way to change the culture in a way that would make
employees feel closer to the outcome. Jack created a small company culture so that all of his
employees could be engaged and feel like they had a voice in the decisions that were affecting
them. Giving employees a voice and making sure that he had the right leaders in the right places,
he opened the “line of sight” to the employees. They did not have to cut through all the red tape
when they had an idea, nor did they have to wait for a quarterly or annual update to know how
their business unit was doing based on their performance.
, .Organization Behavior and Theory GE and
Superado Questions
Motivation is the combination of expectancy, instrumentality, and valence. With the larger
“line of sight”, Welch was able to expect more out of his employees and they understood what
job they were expected to do and how to do it. They understood exactly what needed to be done,
so additional effort also meant higher performance which would not happen if the employee did
not see the vision. Next, it is desired to be rewarded for what you do. In GE’s case, they
enforced a forced ranking system that allowed them to know who those top people were and
more importantly, who the bottom people were. With the model to release the bottom 10%
every year, employees understood that their performance was directly tied to their job,
promotions, and raises. Lastly, they valued this as important, of course they wanted to keep
their job, but on top of that they wanted to be better than they are so that way they still can move
up in the company and take on new experiences.
2. What behavior does the incentive system reinforce?
▪ Is this behavior in accordance with GE’s culture?
The incentive system at GE promotes collaborative behaviors of idea-seeking and sharing,
rather than just individual idea creation. This system emphasizes GE’s focus on striving for
stretch targets, but it does not replace the objective of hitting basic targets. The major effort with
the new incentive system is to create an environment where people can be their best. While
employees are not held accountable for failing to reach the stretch goals, the goals are used as a
motivating tool to push them to be better than they thought they could be. If these goals are
attained, the rewards are substantial. Welch wanted to create culture that instilled self-
confidence, and that’s exactly what the incentive system encouraged. The objective was to
