Otherwise, you undermine your organization, your brand, your culture, and your long-term strategy. You want your people – all of your people – to be doing their work and achieving their results in the right way. What do we really want to manage? Performance (as demonstrated by behaviors and outcomes) in line with the organization’s values and culture. If we measure performance by A, B, C, or 1, 2, 3, or some nine-box distribution grid, we will manage to those measures. But we need to be cognizant of the oldest cliché in the human resources manual: “You can only expect that which you inspect”. We all value competition and merit in determining rewards and recognition. What corporation benefits from that form of competition? How can trust, respect, initiative, and teamwork be fostered in such an environment? It also didn’t recognize or appreciate the synergies created by grouping complementary teammates together. By performing at a high level such a person would be setting themselves up for likely future failure. However, A Players would be promoted and grouped with other A Players – suddenly, an A Player in one setting was very likely to be a B or even a C Player in an elite grouping. You would think this would be a good thing. An outstanding contributor would be ranked an A Player. But the most insidious aspect of the system was the way it discouraged performance. Similarly, the collaboration needed to get a joint project done was impeded. Why help a teammate if, in doing so, you would be helping them perform? Since there can be only so many A Players, you are cutting your chances down in the process. How? Everyone was afraid of being seen as a B or a C. Employees at all levels are secretly complaining that this very system absolutely destroyed teamwork, collaboration, and the drive to innovate and perform. It has come to light recently that Microsoft’s outgoing CEO, Steve Ballmer, was a huge champion of Forced Ranking. “JULY 24, 2012, Vanity Fair: “Every current and former Microsoft employee … cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees.”” It has become commonly known as the ‘shadow rating system’. At a recent conference on the future of performance management, a number of organizations that claim to have dropped the practice and have moved to ending the formal annual review (and all rating scales) claim that employees still feel strongly that senior managers consistently list rank performance. What does it say when, at the end of the year, that manager must stand up and declare some employees to be crucial while others are expendable? What does that do to the morale of the group in question?Ĭall it what you will, forced distribution is still forced ranking. This forces us to consider a potential problem – if a manager is successful in getting his or her employees to meet or exceed their team objectives, is it legitimate to assess some of those employees as poor performers? Presumably, a manager who is achieving such success is holding people accountable, removing obstacles, coaching desired performance, and doing everything necessary to produce desired results. Companies such as GE, Amazon, Microsoft, Facebook, Apple, and many others have dropped the concept after once running with it.īut managers are also just human beings (most of the time), and it seems unlikely that the practice of forced ranking doesn’t force them to silo their A, B, and C Players pretty sharply. Today, Welch himself has second thoughts on the concept. The process has not withstood the test of time. From his perspective, Forced Ranking is a humane system of performance management (Wall Street Journal in a January 2012 article). We can credit Jack Welch with popularizing the concept when he ran GE to such a great performance record. Is this just a case of employees being afraid of a cutthroat but legitimate form of performance appraisal? Or do they have a legitimate beef? This is especially true when ranking is combined with “yank”, meaning automatic dismissal of the C Players. No matter where you go, employees hate forced ranking. There is a long-standing belief in the business world that people performance follows a basic bell curve a few are ‘outstanding’ and some are just ‘deadwood, but the majority are simply average.Īt one point, approximately 60% of the Fortune 500 were reportedly using some form of ‘rank and yank’.
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