It's Time to "Stack and Yank" Forced Ranking

Forced ranking performance reviews evoke a rainbow of emotions from both managers and their employees. For the most part, managers don’t want to conduct them and employees don’t want to receive them. Most organizations recognize the value in identifying the strengths and weaknesses of employees, but struggle creating a positive and productive experience.

Over the last twenty years some of the biggest Fortune 1000 companies have utilized forced ranking to increase productivity and weed out poor performers. The process can vary between organizations but it generally looks something like this: Managers are tasked with analyzing their team members and placing them in a bell curve. The top 20% merit a pay increase and stock options while the bottom 10% are put on probation or even terminated. The remaining 70% lie somewhere in between.

While it looks really cool on a graph, it is a bit dehumanizing. Real-life situations don’t belong on a graph. Graphs aren’t competitive. Graphs don’t have insecurities. Graphs don’t capture the human aspect of real life. Forced ranking would work great for a workplace of robots, but people are more complex.

Even if you aren’t normally a competitive person, if you’re in a battle with your colleagues over who gets the raise and who gets the boot, you’re going to do whatever it takes to come out on top. Say goodbye to creativity and innovation because that requires idea sharing and helpful contribution.

Steve Ballmer, former CEO of Microsoft, describes the early 2000s as the “lost years.” Their traditional “stack and yank” performance management model left employees feeling insecure. Rather than building on good ideas together, their engineers were actively sabotaging other engineers’ projects to improve their own ranking.

Another problem with forced ranking is that it automatically assumes that only 20% of your people will be great performers. Imagine if the Golden State Warriors felt that way about the players on their roster. They certainly wouldn’t be the champions they are today.

In the collaborative work environment of today, forced ranking is more divisive than motivating. In companies where teamwork is valued, forced ranking is not a fit.

While not the ideal performance management system in most instances, forced ranking does have a place in specific situations. In a bad economy, when companies are forced to make layoffs, the forced ranking system may be one way to make hard decisions about who will go.

Forced ranking can also be utilized when managers fail to do accurate performance assessments. Many managers find it difficult to have the tough conversations. Forced ranking forces them to differentiate talent and hold their workforce accountable.

However, on a day-to-day basis, most businesses would agree that a cut-throat, “survival of the fittest” environment is not conducive to productivity and growth and undercuts workplace morale.

Employees don’t want to be at war with their colleagues. They want to create, innovate, and collaborate. They want to increase their skill set and feel like their contribution is making a difference.

Performance management shouldn’t be about measuring your employees against each other, but rather about finding a way to continually increase growth in each individual team member—humanizing the workplace and creating an environment where people can develop and grow.

Continuous feedback and development can help increase employee engagement and performance. Managers need to invest in real relationships and find ways to develop their team for success.

Download this article to learn more about creating a performance management system that actually improves performance.