I’ve been doing some video chats for CareerBuilder, and they’re pretty fun. We use a combination of Google Hangouts and Twitter, and what you end up with is a crazy and interesting mix of video and interactive tweets.
We discussed talent management strategies and techniques in the last episode. Tim Sackett makes an offhanded comment that he likes forced ranking.
Now, listen, I have four cats. I rank them on a regular and ongoing basis. Emma is the best all around, Jake loves me the most, Molly is the smartest, and Roxy is the new baby. They all have strengths and weaknesses. But the order of “who is the best” changes based on my mood, and honestly, how much those cats are bringing it on a daily basis.
If you told me I had to line my cats up and rank them, and then cut the bottom x%, I would say—they’re all great and your rules are stupid. It’s not like I’m going to replace my cats with better cats. They’re cats. That’s not how this works. That’s not how any of this works.
And that’s how I feel about your talented people. Even old school blue chip companies–and brutal sales teams that love blood and sport—have ditched this model for something a little more humane.
I know we want to push our teams to achieve new goals. I know you want an awesome workforce. But Tim’s words had me thinking that everything old becomes new again. Forced ranking might one day come back in vogue. I would just warn you that it’s nice to look back at something simple like forced ranking and say, well, it worked for Jack Welch.
Nothing comes from forced ranking except fear and loathing in the hearts and minds of your employees. Fire people who suck, reward people who do a good job, and stop ranking and stacking people (or cats) for the sport of it.
Laurie – IMHO, the reason forced ranking still has a home is for several reasons:
1) It is way that organizations that have an ineffective performance culture can “show” that they are managing performance (akin to your point about letting go of poor performers)
2) Similarly, companies that are poor at differentiating performance can always lean on this method to do this (again, similar to #1)
3) Worst of all, it is used to divvy up the already small amount of “merit” dollars that are available. i.e. most companies don’t want to dole out more than 2.5% on wage increases, so they do it based on the performance rankings of the forced ranking system. This way, they can show how your “hard work and performance” aligns with your pay increase.
To the point and very accurate. It is unrealistic and inefficient to put people into a forced ranking. It also takes a lot of management time away from running the business.
Rankings tend to cause a lot of stress, and we all know that this is not good for the health or productivity. Just as you said, the rewarding system should be based on the results. There are situations when it is important to focus more on the people and less on the numbers.
Neuroscience certainly backs you up.
David Rock of NeuroLeadership Institute was referenced in the July/August issue of HBR saying that when people learn they are being compared to others it creates a *threat response* and cortisol levels skyrocket. All of which makes it difficult for people to take in other information, so good bye effective performance reviews.
But like many ineffective things, forced ranking seems to have a half-life of its own.
Thanks for taking these issues on and fighting the good fight.