In business leadership circles ‘rank and yank’ is making a comeback. According to the Wall Street Journal, about 60 percent of Fortune 500 companies use a form of this system that ranks employee performance by levels, usually 1, 2, 3, although they often give it a more pleasant name such as talent assessment system or performance procedure. Other monikers are forced ranking or simply employee ranking. Former GE CEO Jack Welch championed ‘rank and yank’ in the mid 1980s as a way to jettison underperformers and leave only high achievers. It’s difficult for an employee to argue with metrics. Many contend that forced ranking is Draconian, demoralizes employees by turning them into a number and not a person. Some say it promotes backstabbing and can be used to promote favoritism. In an age when all of our kids receive trophies just for showing up to a game, a reality check on one’s performance is welcomed. It lets us know where we stand and what we need to improve. 
Unfortunately, many companies use forced ranking solely as a way to get rid of their lowest performing workers especially in times of financial crisis. The system has all the markings of a legal maneuver rather than a way to improve an individual’s performance. First, rankings should be done quarterly not annually. This fixes several problems. How many managers remember what an employee did six months ago? Also, some unscrupulous workers, especially those in sales, will underperform all year then put on a hard press during Q-4 in order to keep their jobs and ensure their year-end bonus. People and companies need continuous measurement and improvement. Second, managers must think of employee rankings as a way to improve a company’s overall performance and not solely as a reason to toss people out of their jobs. Management must make an honest effort to coach those in the bottom level and show them how they can move up in rank. Too many managers let bad performers continue in their jobs, flailing and underachieving, just so they don’t have to confront them. As my friend notes: “This is very cruel to employees. You’re not doing them any favors by letting them stay in a job in which they can’t succeed. If a person can’t move up even after a good faith effort to coach them, then they need to be let go to find a job that is more suitable – one in which they can succeed and feel good about themselves.” Bottom line: managers should look at employee ranking as a way to improve an individual’s professional growth and contribution to the company and not for any other reason. |
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The Tricky Ethics of ‘Rank and Yank’ Management By Larry Kahanerposted Feb 8, 2012 10:25 AM by Jacqueline Lara [ updated Feb 8, 2012 10:27 AM ] |