Organizational Commitment
General Electric has a particularly high turnover rate among employees. The simple fact
that more than half of the people that make up its workforce have fewer than five years of
service with the company is evidence in the statement that “although many people work
for GE, not many people stay at GE” (General Electric, 2006). This lack of organization
commitment is strange seeing as GE invests over $1 billion yearly in the education,
training, and certification of its current and future employees, primarily through the John F.
Welch Learning Center located in Crotonville, N.Y (General Electric, 2006). This high
degree of investment in the individual should theoretically increase normative commitment
due to the psychological feelings of obligation that might be manifested (Jason A. Colquitt,
2013). However, this is not what the data shows.
GE has had a long history with employee relations that could hamper organizational
commitment regardless of the amount of capital being poured into employee training. Jack
Welch, ex-CEO of GE and who’s reputation for employee termination earned him the
nickname “Neutron Jack”, skyrocketed the company from a market value of $14 billion to
one of $410 billion in under ten years (Leung, 2009). However, even though the business
was successful, Welch’s management strategy of forced ranking, which consisted of
mandatory evaluations, ratings, and classifications of all employees, and could possibly
termination, had the adverse effect of “weeding out” those that failed to perform or those
that simply became burned out (Jason A. Colquitt, 2013).
Forced Ranking is not viable in the long term and thus is not practiced any longer at GE.
However, the organizational culture still has some relics of the system tied into it’s
polices. Recently though, GE has incorporated many internal tools to judge the
organizational commitment of its employees (General Electric, 2006). In one such survey
it was shown that more than 75% of employees would agree to statements that recognize
successful corporate leadership, manager/supervisor support, and frequent citizenship
behaviors within the company (General Electric, 2006). Despite the size of GE, it has
developed a closely-knit organizational culture that has created strong ties amongst all
levels of employees. This, according to the erosion model, should strengthen employee
bonds and thus reduce the likelihood of employee turnover by increasing affective
commitment (Jason A. Colquitt, 2013).
GE’s reputation also plays a crucial role in employee commitment to the company. GE
long history, since its founding by Thomas Edison, and culminating in its recent ranking in
