JC Penney-Color Coding Employees is a Smart Practice - upstartHR

JC Penney-Color Coding Employees is a Smart Practice

Recent news about JC Penney color cording their employees has garnered some interesting commentary. Here’s a snippet:

JCPenney has split up its associates into categories based on their performance and abilities, according to sources inside the company.

The move has employees worried.

Sources told us that on a broadcast to supervisors and managers in January, JCPenney VP and transformational talent leader Michelle Steitz said they were to categorize their associates into one of three categories:

  • Red — Remove from company
  • Yellow — Coach up or out
  • Green — Go forward

They were also told to “be prepared to make decisions” in the months ahead, according to a JCPenney executive.

“Not only were we supposed to do this with our team members, but as a Store Leader I had to categorize my entire team,” explained a JCPenney store manager.

Many associates don’t know that they’ve been graded and placed into these color categories — m ultiple JCPenney associates we corresponded with were still in the dark about the red/yellow/green system. source

Hint: this is not new

We hear this sort of discussion often, but the terminology usually refers to “A” players, “B” players, and “C” players. The tendency is to see this as a negative practice, but it’s really a way for companies to determine where to spend their limited training and development budgets. The practice also plays a role in succession planning.

Do you spend additional money on a “C” player who is disengaged and actively looking for another job? Would it be better spent on an “A” player who is a superstar performer? Making that determination in itself is another discussion entirely, but there’s nothing inherently wrong with differentiating performance.

I’d also point out that not differentiating employees based on performance is how you create a culture that supports and encourages poor performance. If you don’t treat the “green” employees differently from the “red” employees, the good ones will naturally trend lower with regard to performance. It’s not rocket science.

Check out the video below for more on the topic. I’d love to hear some ideas on how they might have handled this differently or if you think it was the right way to go. Subscribers click through to view.

Check out the video

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    Comments

    1. Patty Tanji says...

      Hi Ben,

      Great post and video.
      This is the part that disturbs me….”Many associates don’t know that they’ve been graded and placed into these color categories “… Wouldn’t it be best if employees had this conversation with their managers…on a regular ongoing basis…so they wouldn’t be surprised by how their performance is being categorized and given the opportunity to improve? I’m thinking about a book called “Leading Without A Title” by Robin Sharma. A culture that openly communicates and supports each other’s efforts to lead is the ideal. Even at a company like JC Penny. The financial condition of the firm should come as no surprise to the employees and should be communicated to the employees constantly. Categorizing employees without their input is tantamount to a threat ‘ship up or shape out’ and that’s just not how we ought to treat human beings and a sure way to demoralize employees. Thanks for yet another thought provoking post.

      March 16th, 2013 at 7:25 am




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