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4 Steps to Manage Your Employees and Help Them Win Former CEO of GE was known for using the differentiation system, where employees always knew where they stood in the company. Here is how you can implement the strategy.

By Clay Clark Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.


"The team with the best players wins." -- Jack Welch

When Jack Welch was the CEO of General Electric, he was able to produce record growth year after year by using a few simple principles relentlessly. The system of management he used was called differentiation. At the core of the differentiation system is a belief that everyone in should know where they stand in terms of their performance at all times.

Here are four steps to make this system of differentiation work for you and your business:

1. Develop a ranking system.

Develop a system that ranks every employee on an A to C level for different factors including ability to do their core job and complete tasks, ability to get things done and make decisions and the ability to bring energy to the workplace every day. Learn which players are on each level A, B or C to manage these different player rankings, then devise a plan to celebrate the A players, appreciate the B players and fire the C players.

Related: 6 Ways to Improve Your Management Style

2. Set aside time to develop your team.

It is important to let every employee know where he or she stands throughout his or her time in your business; I would suggest every quarter of the fiscal year. By being honest and open with each team member and their performance, you create value in their efforts. Those that are lacking with either find encouragement to become better or they will quit.

Related: Stop Sugar-Coating Your True Opinion

3. Create an acknowledgement strategy.

Develop a way to publicly celebrate your A players and appreciate your B players.

Welch celebrated A Players with kind words, public recognitions, bonuses, promotions, plaques, awards and trophies. His system also rewarded the B players for their dependability and loyalty to the company. Some B players can ultimately become A players with the right mentorship and positive feedback.

4. Have a plan of action for poor-performing employees.

Let the poorest performer know how they are doing, give them an opportunity to improve, or have them leave. Often C players can be seen as bottom feeders who can't handle candid feedback in the workplace. They are easily offended or emotionally hurt whenever they are told how they are doing or what they could do better. Normally you can spot a C player from their behaviors -- they tend to always be late, constantly pessimistic and always have excuses as to why they could not get their tasks done. Let your C players know where they stand without any sugarcoating. Give them two weeks to improve, and if they refuse, let them go.

Related: 3 Common Leadership Mistakes That Make a Miserable Company Culture

Clay Clark

Founder of

Clay Clark is the founder of, a company offering online education for entrepreneurs in 15-minute videos taught by world-class mentors.

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