Forced Ranking is Stupid

 

Workforce Management has tons of articles full of content. So I gotta wonder why they posted Forced Ranking Could Improve Business Performance. In the article, it says,

“Forced ranking, the study finds, is more successful in the first several years of implementation.”

Well, duh. If you force rank — even once — the people who find this offensive leave. (I did when I worked for a VP who believed in forced ranking.) So, you quite successfully build a culture where forced ranking is valued. In my experience, you create a cut-throat culture, where it matters more who gets ahead rather than making great products. If you continue to force rank, it’s possible you can improve the the generate state:

  • You actually do improve the productivity of the people who are left because you got rid of the people who weren’t performing.
  • You obtain feedback about your hiring so you hire fewer people who need to be fired.

But here’s what I’ve seen most often with forced ranking:

  • People working in a CYA (cover your tush) way.
  • People not taking risks — because to take a risk exposes the very real possibility of being fired.
  • Managers consciously hiring not-so-great employees every so often, so they’d have someone to fire.
  • People working to maximize their review/evaluation, not for the good of the company or the product.

I find it incredible that these professors published conclusions based on a simulation. What would be worse is to use forced ranking because some academics (whom are not subject to forced ranking) probably need a paper to publish.

Managers need to provide effective feedback weekly to their employees. If you give feedback, coaching where appropriate, and use a reasonable evaluation system, you don’t need to use forced ranking. Forced ranking delivers precisely what you don’t want: people working for their own betterment. Forced ranking is the coward’s way to manage people.

About Johanna Rothman

I help managers and leaders do reasonable things that work.
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10 Responses to Forced Ranking is Stupid

  1. Steve S says:

    Here, here! I agree. I’ve seen it done (actually supposedly going on now) but I do not believe it will last. There are too many opportunities for inconsistency. It does provide an opportunity for an honest to good discussion about whose doing what, but you know, that should happen anyway without going this malarky.

  2. Chip Patton says:

    I heard an editorial on NPR’s Marketplace yesterday (3/8/2005) suggesting this type of system be adopted with government employees. He talked about how the top 10% should be richly rewarded, these are your innovators, your up-and-comers, your movers-and-shakers and your bottom 10% should be put on probation, to improve or to be subsequently dismissed.
    I see these systems as only being good for that top 10% and maybe for those few on the bottom who are shaken up enough to find a better fit, internally or externally. The rest of the bottom are devastated, at least temporarily. But the bigger damage is to the middle 80% who are disenfranchised. They now have little feedback about whether they are within reach of the top or in danger of falling off the bottom. And little reward for their steady work. In any case they have been broadly brushed as average and you can expect them to perform no better than that from this point forward.

  3. Thierry Thelliez says:

    At the end of the article they say that they did not factor morale in the simulation…
    I cannot not beleive it. What could more important than morale? You probably get an order of magnitude more productivity from an empowered and motivated staff.
    Can someone send this genius a copy of ‘Emotional Intelligence’?
    Thierry

  4. Earl Everett says:

    I first encountered this idea a few years ago when the senior management of the company I was with became enamored of it while group-reading Jack Welch’s (of GE) first book.
    Defensively, I read it, and was struck by a point the book made that seems to be constantly overlooked or ignored. GE’s experience implementing this found that a manager new to a given group (i.e. in his or her 1st year) could more-or-less objectively identify the bottom 10% to be zapped. The process still worked, but marginally so, during year 2, and that by year 3, the manager had come to identify so closely with the group that objectiveness was no longer possible. (I remember that it recounted tales of long dead or departed employees being tagged, for example.)
    I agree with Johanna that it’s fundamentally a stupid idea, but if it’s going to be implemented, a program of manager rotation must be implemented as well. No one talking about this seems to recognize this, or the additional issues that will bring up.

  5. David Vukovic says:

    I recently left the employ of a manager with this exact mind set of forced ranking.
    Force rank the crew and according to him the good will move on to other jobs and those that he wants will stay.
    On said managers shelf was the book ‘The 48 Laws of Power’ by Robert Greene and Joost Elffers. Please see (http://www.tech.purdue.edu/Cgt/Courses/cgt411/covey/48_laws_of_power.htm) for a synopsys of these 48 laws.
    After looking over this list, I find that this narcistic manager followed these laws to a ‘T’.
    I propose that the manager that believes in forced ranking manages by fear, and is following these laws of power.
    Law 31
    Control the Options: Get Others to Play with the Cards you Deal
    The best deceptions are the ones that seem to give the other person a choice: Your victims feel they are in control, but are actually your puppets. Give people options that come out in your favor whichever one they choose. Force them to make choices between the lesser of two evils, both of which serve your purpose. Put them on the horns of a dilemma: They are gored wherever they turn.
    Law 17
    Keep Others in Suspended Terror: Cultivate an Air of Unpredictability
    Humans are creatures of habit with an insatiable need to see familiarity in other people’s actions. Your predictability gives them a sense of control. Turn the tables: Be deliberately unpredictable. Behavior that seems to have no consistency or purpose will keep them off-balance, and they will wear themselves out trying to explain your moves. Taken to an extreme, this strategy can intimidate and terrorize.
    Law 15
    Crush your Enemy Totally
    All great leaders since Moses have known that a feared enemy must be crushed completely. (Sometimes they have learned this the hard way.) If one ember is left alight, no matter how dimly it smolders, a fire will eventually break out. More is lost through stopping halfway than through total annihilation: The enemy will recover, and will seek revenge. Crush him, not only in body but in spirit.
    All the best and keep in touch,
    David*Vukovic
    Houston Texas

  6. Paul says:

    Are you suggesting that all forms of competition have negative consequences? If not in which circumstances can competition help?

  7. Krishna says:

    Hi,
    A lateral question. Is the primary goal of an organization to foster competition? I have seen many managers believe that competition unlocks performance and motivates the performers but in todays workplace, where roles and definitions are getting more and more ambiguous and intangile to measure, as well as where most of the work gets done as a part of teams, is this still the best way to improve performance?
    Krishna

  8. Krishna, the primary goal of an organization is not to foster internal competition. It’s also not to create a star system where all the rewards are funneled toward certain designated employees.

    The primary goal of a business is to get work done, create a good organization, ship product, and make money by selling it in the marketplace. Stack ranking and other mechanisms that drive internal competition are a terrible strategy for getting any of those things done. They lead to distorted office priorities and other unintended consequences.

    Companies and departments are cooperative organizations: clusters of people working together. The bigger the company, the more essential it is that the parts of the organization cooperate with each other. It’s ironic (in the sense of “ironic” that actually means “stupid”) that bigger companies are the ones likeliest to embrace stack ranking.

    Some of the problems:

    1. What are the odds that in a huge organization like Microsoft, every department and work group has the same 20-70-10 distribution of good and bad employees? They’re not hiring at random.

    2. Even if the 20-70-10 division is valid, which is questionable, it’s not statistically meaningful when applied to groups with fewer than (approximately) 30 members. No boss can effectively manage 30 employees who report directly. The 20-70-10 ratio is either going to be applied to groups too small to be statistically meaningful, or it’s going to be applied to larger groups by a boss who isn’t all that familiar with everyone’s work.

    3. When you downsize, you always lose people you wanted to keep, because it’s easy for them to find new jobs elsewhere. They may quit because they see downsizing as an admission that the company is in trouble. They may anticipate more firings to come, and decide to hit the job market ahead of the crowd. They may just be disgusted by stack ranking. There are other possible reasons, but the outcome is the same: you lose some percentage of exactly those employees that stack ranking is supposed to identify and reward.

    4. Do you really want to use a system that rewards employees whose co-workers fail? Imagine your company has just gotten rid of the two lowest-ranked members of your team. Who do you want to replace them? Answer: not someone who’s as good or better than you. What you want are a couple of redshirts.

    5. If an employee has worked hard all year, met their commitments, demonstrated competence, been a team player who helps others, and really put their heart into their work, but because only 20% of their team can get top ratings they’re told that their performance wasn’t as good as it might be, there’s a minor chance that they’re going to feel motivated to try harder. There’s a bigger chance that they’re going to decide the company is stupid, unfair, doesn’t value them, and cares more about sucking up to management than it cares about productive work. It’s very hard to regain their trust after that.

    6. Stack ranking forces good managers to impose unjust ratings on the people working under them. It gives bad managers an easy way to screw over employees they dislike.

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