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GE Is Thinking About Getting Rid of Annual Raises

This story has been updated to include comment from GE.

Will annual reviews soon go the way of the BlackBerry?

General Electric, long a trendsetter in corporate management, is reportedly considering scrapping two core tenets of its review process: the five-point employee rating scale and the annual raise.

According to Bloomberg, the 124-year-old company will be deciding the fate of both practices within the next couple of months.

Jack Welch, GE’s (GE) CEO from 1981 to 2001, was the original pioneer of the five-point scale, or the so-called rank and yank system of rating employees and annually firing the bottom 10% of performers.

While GE still uses this rating system and employees have annual reviews, they are now seen more as guiding conversations than critiques, according to Fast Company. “We are now working across the company to collect feedback on more ways to improve rewards and compensation,” wrote a GE spokesperson in an email to Fortune.


GE is not the only major employer moving away from assigning numerical values to employee performance. Just last week, Morgan Stanley (MS) announced it would begin rating staff with adjectives instead of numbers. Professional services firm Accenture announced that it was moving away from the annual review altogether last summer.