Editing Vitality curve (section)

== Overview ==
The vitality model of former [[General Electric]] chairman and CEO [[Jack Welch]] has been described as a "20-70-10" system. The "top 20" percent of the [[workforce]] is most productive, and 70% (the "vital 70") work adequately.  The other 10% ("bottom 10") are nonproducers and should be [[termination of employment|fired]].<ref>{{cite news | last = Jones | first = Del | title = Let people know where they stand, Welch says Ranking workers pays, former GE chief says | work = [[USA Today]] | location = 5B | date = April 18, 2005 | url = https://www.usatoday.com/educate/college/careers/Advice/advice4-18-05.htm | access-date = 2009-09-09 }}</ref><ref>{{cite news | last = Murray | first = Alan | title = Should I Rank My Employees? |work = [[The Wall Street Journal]] | date = 7 April 2009 | url = http://guides.wsj.com/management/recruiting-hiring-and-firing/should-i-rank-my-employees | access-date = 2009-09-09 }}</ref>

The often cited "80-20 rule", also known as the "[[Pareto principle]]" or the "Law of the Vital Few", whereby 80% of crimes are committed by 20% of criminals, or 80% of useful research results are produced by 20% of the academics, is an example of such rankings observable in social behavior. In some cases such "80-20" tendencies do emerge, and a [[Pareto distribution|Pareto distribution curve]] is a fuller representation.

=== Ratings ===
In his 2001 book ''Jack: Straight from the Gut'', Welch says that he asked "each of the GE's businesses to rank all of their top executives". Specifically, top executives were divided into "A", "B", and "C" players. Welch admitted that the judgments were "not always precise".

According to Welch, "A" players had the following characteristics:

* Filled with passion
* Committed to "making things happen"
* Open to [[idea]]s from anywhere
* Blessed with much "runway" ahead of them
* Possess [[charisma]], the ability to energize themselves and others
* Can make business [[productive]] and enjoyable at the same time
* Exhibit the "four Es" of leadership:
** Very high [[Energy (psychological)|Energy]] levels
** Can Energize others around common goals
** The "Edge" to make difficult decisions
** The ability to consistently Execute

The vital "B" players may not be [[visionary]] or the most driven, but are "vital" because they make up the majority of the group. On the other hand, the "C" players are nonproducers. They are likely to "enervate" rather than "energize", according to Serge Hovnanian's model. [[Procrastination]] is a common trait of "C" players, as well as failure to deliver on promises.

===Consequences===
Welch advises firing "C" players, while encouraging "A" players with rewards such as promotions, bonuses, and [[stock option]]s. However, if such rewards become a meaningful portion of “A” player's overall compensation, it can lead to [[perverse incentive]]s, especially if the rewards of being an “A” player are predictable and recurring, such as a normal part of the annual review process. When broad-based stock compensation is the norm, avoiding perverse incentives can be difficult.<ref>{{Cite web|url=https://www.nceo.org/articles/employee-stock-options-factsheet|title=Employee Stock Options Fact Sheet &#124; NCEO|website=www.nceo.org}}</ref>