Oh my, you are so wrong.
The fact that it SEEMS like Facebook is easy doesn’t mean it actually is. Facebook has a problem basically as hard as Google’s — looking for correlations and patterns in a VAST amount of data. Facebook, for whatever reason, hasn’t made as public a point of its computational nous, compared to, say Google, but talk to people in Silicon Valley…

Take just two example (which are on the public side of the Faecbook ledger): Prineville and Hiphop. Both of these, very different, are not the products of a bunch of amateurs.

His insight is what most people are missing, labour supply with newfound wealth is backwards bending –Economics. Jack is saying that the guy that is now worth 1 or 2M but gets paid 100 or 150K will re-evaluate how much time/effort he spends working, his ultimate performance will decrease b/c he now has the financial wherewithal to do other things and the value of that extra dollar from working isn’t enough to keep him working, instead there is a shift to enjoy leisure time.

Regardless of the utility he used to receive from his job, money changes that for most people; unless of course you’re truly the founder, visionary or other principal of the organisation. Jack is saying that there will be wealthy people who no longer have the same passion as they did before, they will show up and work but they will lack that burning desire to push the company forward and keep it #1. Look at any sport to see how it works.

Nothing kills performance more than deadweight on your team, in the beginning everyone was working their assess off towards a goal, now that they have achieved it, priorities change. The next generation of Facebook employees needs to have incentives; otherwise they will find a start up where they can pour their efforts into.

This is the same Welch who’s described in glowing terms the wonders of getting rid of 10% of his management periodically, regardless of abilities or where people are in their lives, just so nobody gets too comfortable. So the goal in surviving these reviews is evidently to set aside enough to job-hunt or retire on before you burn out, or to get high enough on the ladder to get nice and comfy. I must say that whenever I’ve seen Welch in any public setting he’s always impressed me with an enormous degree of self-satisfaction, or self-congratulation, above anything else.

And I’m not sure this is so far removed from the management school that said “if it ain’t broke, break it.” Which I experienced in action, and which ultimately is a tool to achieve managerial totalitarianism.

I do seem to recall that GE’s big successes under Welch were mostly in finance rather than manufacturing, and it’s interesting to see that Immelt is making a big deal of actually investing in domestic manufacturing for a change. I think Welch was fortunate in his timing as much as in anything else.

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You nailed it Felix. Good work.

Jack Welch ran the country’s largest manufacturer for a couple of decades. He has to be aghast watching our industrial base be replaced by useless, mind-numbing, time-wasting advertising funnels, like Facebook, Groupon, Zynga, and all the rest of the pump-and-dump crap Sand Hill Road is pimping — again.

Any “help” Jack can offer that helps put that ridiculous piece of American “industry” out of its misery sooner rather than later is a patriotic service to the rest of us.

I think Jack has in mind a review process that is 360 degrees and where people are honest and critical in both directions. Unless there is a clear company culture, like at GE where this is ingrained, it’s not going to work. Imagine one of Jack’s SVP’s going in and telling him off in a 360 review! How long do you think he would last? And it certainly isn’t going to work for a bunch of coders who have no personal skills and would rather be left alone…the opposite of customer service or sales teams. Just a terrible system for any software company.

I’ll go out on a limb here and say Welch has never managed a .com, and understands the culture there as much as those workers would ever understand what it’s like to be an exec at a giant multi-national like GE.

I get the idea that early Facebook employees with stock worth tens of millions aren’t going to be motivated much by a sub $100k bonus – it will be pride, enjoyment of work, etc. I also get that most employees prefer a collegial environment. What I don’t get, however, is how one is supposed to run a company the size of Facebook without positions like, uhh, managers? Similarly, I’m going to assume that not every employee hired by Facebook will be good at their job (or a fit with the culture).

So, while I get that it’s easy to say that annual performance reviews have problems, what’s the proposed alternative? At some point, in some way, you’ve got to decide who to promote, if someone should be fired, and, before one of those happens, to communicate to people if you think they’re doing well or doing badly, ideally with some constructive comments on how they can improve. It’s great to say that managers should be doing that every day, but in my experience most managers would rather focus instead on the “do the project” side of things, so guaranteeing that reviews happen periodically makes sense.

It’s like annual budgeting – easy to say that it’s a waste of time, encourages people to game the system, etc. – but an organization of any size tends to be a clusterf**k without it.

Working next to a person that made 20 million while you make $100K because you joined the company later is likely more divisive than a performance review. That’s why many of the original folks will likely move on.

Engineers are not all altruistic academics that are simply motivated by working around smart people…those folks work at universities as researches, not at facebook…the young 20 somethings going to facebook want to make money and build long term wealth AND work at a great fun place.

Companies must have a mechanism for determining performance and rewarding those employees that add value. It’s just silly to think otherwise. The traditional method of doing that might not be right for an engineering firm, but that simply means there needs to be a better way for those kinds of firms and there are good models for doing that…like at Gore.

No one likely judging others, but performance is important. In sports, you bench some and start others and you need to know who your key players are.

In their filing statement, Zuck, states that one of the IPO’s main functions is to reward its shareholders and employees.