Beginning of the end of rank and yank?
TweetMicrosoft announced a lot of changes in their May 18th town hall meeting. Included amongst those changes is the elimination of stack ranking, otherwise known as rank-and-yank. Force fitting employee performance onto a bell curve, made famous by GE, Microsoft and other biggies, has so far been the favored performance review system. Now, with Microsoft dismantling this system, this system may soon lose steam. Also read mini-microsoft for more details. Lots of comments in there to add color to this tectonic event.
Technorati Tags: bell curve, rank and yank, stack ranking, employee performance
An article by Jeffrey Pfeffer and Robert Sutton in the January edition of Harvard Business Review titled “Evidence Based Management” touches upon this topic in reasonable detail (Perhaps their book on this topic will shed more light on this. Habe not read it yet).
They suggest that companies, before adopting a style/system, should look for more evidence to make sure that the system will actually suit their needs. So, instead of cloning a well known or successful management style (the GE “forced ranking” system in this instance) a company should look deeper (or evidence) to see if the style will actually suit and benefit them.
In this case, a company should ask the question – “what is the similarity between my company and GE that will make this effective for my company”?. Also, they should look beyond GE and see if other companies that profited from the “rank and yank” system. Pfeffer and Sutton point out that – Performance improves with team continuity and time in position – two reasons to avoid the churn of “yank and rank”.
In essence, they suggest that a company should assemble enough evidence and weigh the pros and cons before adopting a style or system of management. This seems very common sensical, but perhaps not that easy. (Pfeffer and Sutton discuss more about this – why it is hard to be evidence based).
Also, Joel of JoelOnSoftware fame touches upon this topic in this interview . He suggests that evaluating performance is a not a straight forward grading technology, and that appearance can be deceptive. For example, a person who “appears” to be a slacker might actually be more useful to the team just by the fact that he spends more time helping out his teammates than doing his own work. In essence, he is helping his team mates and the whole team be more productive. So, he urges managers to look beyond the obvious when it comes to “grading” employees.
Ganesh,
Great insights. Upon your recommendation, i had to buy the HBR article and read it. Well worth the $6. Its a brilliant article. This whole evidence based management seems like the next big thing in management.