Do You Color-Code Employee Performance Like JCPenney?

by Chris Young

color code employee performance jcpenneyIt sounds like JCPenny is into colors...  Kim Bhasin shares in her article JCPenney Has Color-Coded Employees to Prepare for Future Firings that JCPenney is categorizing employee performance into a color system.  In January, stores were instructed to categorize their associates into one of three categories:

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

I took a minute to color code our team members at The Rainmaker Group.  Only the green ones are left.  No red and no yellow.  

I would hire each of them again and again and again and again and again.  The partners we have...  All green.  I would partner with them again as well.  

How quickly you remove "red" employees and coach "yellow" employees says a lot about your Culture and your future.  While we have had people who did not fit our culture in the past - they no longer work here.  They are pursuing their hopes and dreams elsewhere. 

Do not wait for the right moment to remove "red" employees.  Remove them as soon as you identify they are low performers.  

It truly says a lot about a company's future performance when there is the actual possibility that there are "red" employees walking around.  What kind of company keeps employees that should be removed?  What do "red" employees do to Customers, the Culture, and the morale of the "green" employees?  

Can you imagine what employee engagement is like right now at JCPenney?  I am sure their employees would say, "Employee morale is lousy because someone categorized us and instilled fear that some people are going to be let go."

I would argue that employee morale had to be lousy in the first place.  

"Red" employees diminish possibility.  "Yellow" employees can destroy potential as well if you fail to take action.

"Yellow" employees - those who need to be coached up or out - are a statistical fact.  Yet "yellow" employees should not be "yellow" for prolonged periods of time.  They are either in or they are out. 

Here is some free advice to JCPenney and companies with "red" and "yellow" employees.  Do something about it right now.  Keeping "red" employees is a powerful indicator as to why your company is performing poorly.  

Just get on with it and do so quickly.  

And if you have any commitment to excellence whatsoever - commit to removing "red" employees as soon as you identify they are "red".  

I just have to wonder...  What kind of company would JCPenney actually be if they had primarily "green" employees?  What would be possible?

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