![]() ![]() In that original Vanity Fair article, one former Microsoft employee neatly sums up the critical fault of stack-ranking. On the surface, it seems less cruel to assess relative ability, rather than inherent ability. While there is stress in having to categorise those who report to you, stack-ranking provides a framework for tough conversations. Figuring out who the top employees are can help an organisation better understand their ideal candidates.įinally, stack-ranking can be particularly appealing to managers. What’s more, stack-ranking generates continual renewal, as every year people in your organisation are assessed and the weak are culled. And who wouldn’t like a system that rewards the former and weeds out the latter? In-company Darwinism seems like a winning formula because it promises an environment of competitiveness where employees push themselves to excel and innovate. Every organisation has its superstars and poor performers. There’s an undeniably pleasing logic to ranking employees. Clearly Facebook maintained the faith, and while exact numbers are impossible to come by, it wasn’t the only company to do so. Since then Microsoft, Amazon, and General Electric itself have all backed away from stack-ranking. A widely acclaimed Vanity Fair article from 2012 linked the decade long fall of what was the world’s most valuable company to the now former CEO and his preferred performance management practice. If Jack Welch and General Electric made stack-ranking famous, Steve Ballmer and Microsoft made it infamous. The essential premise of the ranking system is that your top performers deliver your most impressive results and should be rewarded for doing so the bulk of your staff demonstrate adequate levels of performance and that your bottom performers should be dismissed (the ‘yank’ in rank and yank). General Electric had a three-tier 20-70-10 system (top 20 per cent, middle 70 per cent, and bottom 10 per cent), while Facebook has a system of at least seven tiers. It assumes a workforce can be broken down into a number of discrete performance levels. Basically it’s company-wide survival of the fittest. Stack-ranking (also called ‘rank and yank’ or the ‘vitality curve’) is a performance management system made famous by General Electric. It details how the social media giant runs its stack-ranking program, and is filled with disgruntled ex-employees railing against its injustices and arguing that it created a cult-like environment. That’s the thrust of a recent report by CNBC. Is one of the causes of Facebook’s scandal plagued 2018 their performance management system? Critics say that while the practice might be appealing, it results in troubling outcomes. Vestiges of it remain because people still don't know how to distribute compensation without ranking people, particularly for employees that have the same review rating.Facebook has put stack-ranking back in the spotlight. It becomes part of your job - managing to the metric. I still hate forced ranking despite succeeding in it. It was a far more time consuming process but IMHO fairer. It went from one day to a week-long process and I made people vote anonymously and incorporated a ranked choice system and then aggregated the results. I couldn't in good conscience continue like that, so I took over rankings for my location. Also it was nearly impossible to get rid of the process because of course people who had succeeded in it didn't want change. It was just easier to rubber-stamp the whole process and move on. The process itself was flawed because people had a tendency to stay in the rank where they were submitted because frankly managers didn't have the time, energy or interest in really talking through every employee. While we still used the process I saw everything from voting blocs, managers intentionally submitting all of their employees ranked up one notch from where they should be, managers collecting "dirt" on employees managed by others so they could shoot down those employees during the ranking process and more. I hated the process and as others here mentioned pointed out many times applying a bell curve to a small population is bad math. I managed a small team in a company that then used stack ranking. ![]()
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