December 4, 2013 at 10:14 am
Markus (12/4/2013)
Friends of mine worked for a company that does this and the lowest rated employees are gone in year 2 if they don't improve. I don't know how you improve it your manager has to rate all employees in a 1,2,3 type manner. They used the reasoning of we want only the best employees to work at the company. However, what it DID do was cause a lot of turnover as many good employees would leave.
the hypothesis is that change is good and you are constantly driving people forward to improve. And that those that don't constantly improve should go.
It's a system that can work in some areas (sales), but often doesn't work in others. It also assumes that someone having a bad year or two (health, divorce, kids, etc) isn't worth keeping around.
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December 4, 2013 at 10:25 am
In general performance reviews are a charade.
Before the results of the review process are known, it has already been decided how much will be allotted to merit raises and what the distribution within each department/group is. Rarely are high performing groups rewarded over average or low performing groups.
Usually these parameters have been set at at least two levels above your manager. So it really becomes a "grin and bear it" situation.
December 4, 2013 at 10:33 am
Steve Jones - SSC Editor (12/4/2013)
Markus (12/4/2013)
Friends of mine worked for a company that does this and the lowest rated employees are gone in year 2 if they don't improve. I don't know how you improve it your manager has to rate all employees in a 1,2,3 type manner. They used the reasoning of we want only the best employees to work at the company. However, what it DID do was cause a lot of turnover as many good employees would leave.the hypothesis is that change is good and you are constantly driving people forward to improve. And that those that don't constantly improve should go.
It's a system that can work in some areas (sales), but often doesn't work in others. It also assumes that someone having a bad year or two (health, divorce, kids, etc) isn't worth keeping around.
The place I know of that does this is probalby the #1 employer in the Metro area here and that process applies to all departments. They go through employees like crazy.. constant turnover and a very stressful IT Dept.
Thing is the bottom person can be a good employee... just a tad not as good as the person above him. Not that they are bad... Our DBA staff here... 5 DBAs all are very good... now in that senario you have to rate them and the bottom person has a target on them. Sales... yea, I can understand that.
December 4, 2013 at 10:36 am
djackson 22568 (12/4/2013)
We need talented coders to solve tough problems, and we need average programmers to tackle mundane tasks. Both are necessary
Absolutely. What we don't want or need is deficient employees. We do need people who are willing to just do a job, and do it well, but who have no need to star at something.
Yep. For sure. We want competent, willing to learn and improve, and willing to do what it takes employees. We also need to let people know when they need to improve, but we certainly don't need to force rank people in this way.
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December 4, 2013 at 10:40 am
Markus (12/4/2013)
Steve Jones - SSC Editor (12/4/2013)
Markus (12/4/2013)
Friends of mine worked for a company that does this and the lowest rated employees are gone in year 2 if they don't improve. I don't know how you improve it your manager has to rate all employees in a 1,2,3 type manner. They used the reasoning of we want only the best employees to work at the company. However, what it DID do was cause a lot of turnover as many good employees would leave.the hypothesis is that change is good and you are constantly driving people forward to improve. And that those that don't constantly improve should go.
It's a system that can work in some areas (sales), but often doesn't work in others. It also assumes that someone having a bad year or two (health, divorce, kids, etc) isn't worth keeping around.
The place I know of that does this is probalby the #1 employer in the Metro area here and that process applies to all departments. They go through employees like crazy.. constant turnover and a very stressful IT Dept.
Thing is the bottom person can be a good employee... just a tad not as good as the person above him. Not that they are bad... Our DBA staff here... 5 DBAs all are very good... now in that senario you have to rate them and the bottom person has a target on them. Sales... yea, I can understand that.
Please understand that as a former Purchasing Manager I have zero love of sales people. While I see your point about sales, I don't agree. I believe it is possible (am I REALLY saying this???) to have a sales force where everyone is doing well and exceeding expectations(gag, gag, gag). You would still have someone who had the lowest sales.
My point is that I do not believe this rating method is ever fair. Even if we use an extreme example of rating and firing politicians, it doesn't work. Of course in that case, we all know all politicians are failures... 🙂
EDIT: I just saw the post Steve made where he suggested that this "may work" in some areas, and he used sales as an example. In reality it is probably true that most sales groups have people who are simply not cutting it. Sales is a unique type of role to play, and maybe there are some companies where this might "work". I still don't think it is fair, and I do NOT mean to imply that Steve was saying it is fair either, only that there may be places it might work. I simply shudder to think anyone has to live with this type of review.
Dave
December 4, 2013 at 10:59 am
I'm not sure it's fair, though I'm not sure how much fairness I want in business. We don't have a lot here, with plenty of poor decisions by managers because they have their own inherent prejudices/attractions/etc.
I think this model can work in sales because we do have sales people falling down and you want to get rid of them, and reward the high achievers. however, when you get a good sales force, do you still want to get rid of the worst one? You might end up with an even worse salesperson.
I don't like this system, but I especially don't like it in technology, accounting, probably a few other areas.
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December 4, 2013 at 11:39 am
The article failed in that it set up the conflict, but didn't resolve: so, Steve, how did you rank your employees? Did you unfairly assign a 2?
December 4, 2013 at 2:42 pm
The best way I have seen this applied was at a call centre (had to right the scripts for it).
It worked better because it was a giant sample size of employees (making it more likely that their abilities were normally distributed), their performance did not depend on one another, and evaluation was done with actual metrics.
But I have seen similar theory applied to 'teams' as small as 2, with zero metrics beyond manager opinion. And when it is used like that it is basically a straight-jacket that is both unfair and has unintended consequences.
And what it truly reflects is leadership not trusting their managers to make honest assessments of performance.
December 4, 2013 at 3:01 pm
It's entirely artificial to make an HR department think what they do is a science rather than art.
How do you boil down complex behavioural and performance characteristics into a single digit?
If someone gets the maximum grade then how can you measure an improvement in their performance?
If someone gets the next point down how do you quantify what they need to do to get the maximum grade if that grade is officially unobtainable?
I'd much prefer my manager to say "these are the objectives I need you to complete for the next quarter/6 months, let me know if there are any blockers and I will let you know if the objectives become obsolete".
For me the annual review process is where two adults are forced together in a mutually embarrassing situation where both could be doing something more productive and all to maintain the polite fiction that an annual review process is anything but retro-fitting a justification to a fait accompli in the annual pay review.
December 4, 2013 at 3:16 pm
David.Poole (12/4/2013)
For me the annual review process is where two adults are forced together in a mutually embarrassing situation where both could be doing something more productive and all to maintain the polite fiction that an annual review process is anything but retro-fitting a justification to a fait accompli in the annual pay review.
+1
December 4, 2013 at 3:30 pm
chris 24158 (12/4/2013)
The article failed in that it set up the conflict, but didn't resolve: so, Steve, how did you rank your employees? Did you unfairly assign a 2?
Yes. Sad to say. After much arguing with my boss (the director) and a debate with the VP, I was ultimately told that this was a subjective, relative ranking. Someone was below the others, and whoever that was deserved a lower ranking.
I gave one person the 2, had a conversation about why, and then awarded him the same bonus as the 3s. He was weaker than others, but it was slight and somewhat nitpicky.
I ended up resigning a few months later, and listed this as one of my reasons.
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December 4, 2013 at 5:41 pm
Thanks Steve. I agree, stack ranking is idiotic for high-performing teams and only serves to drive away talent.
December 4, 2013 at 6:48 pm
Perhaps it's me but the primary flaw I noticed is that this is an attempt to use a de facto individual ranking system to measure performance in a team setting. You need to match the metrics/measurements to what it is you're trying to reward; as in - if you truly want to encourage positive teamwork, adding a dimension that measure performance of teams you participate in should be part of your review. You're essentially trying to rank apples by how much they taste like oranges.
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Your lack of planning does not constitute an emergency on my part...unless you're my manager...or a director and above...or a really loud-spoken end-user..All right - what was my emergency again?
December 4, 2013 at 7:36 pm
Matt Miller (#4) (12/4/2013)
Perhaps it's me but the primary flaw I noticed is that this is an attempt to use a de facto individual ranking system to measure performance in a team setting. You need to match the metrics/measurements to what it is you're trying to reward; as in - if you truly want to encourage positive teamwork, adding a dimension that measure performance of teams you participate in should be part of your review. You're essentially trying to rank apples by how much they taste like oranges.
We just went through our reviews in the Sept/Oct time frame. The 1's were below average and are probably going to be shown the door. But the the management style dictated that less than 1% get a 3. The 2's were the expected norm meaning you do your job to at least average if not at a 100% level.
It is not great, but it seems at least somewhat fair.
In addition most rating systems are setup to groom people to be a personnel managers in the future. I told them when I was hired that I can deal with managing project teams, doing training on <SW/HW/systems> for junior staff but don't want to mange people on a permanent basis. I don't like wetware, I like tech. The review system, as usual, emphasizes managing people.
So I always look at any rating system as a joke.
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Jim P.
A little bit of this and a little byte of that can cause bloatware.
December 5, 2013 at 7:42 am
I have heard that the most talented people tried to ensure they weren't working on the same team with other talented people, just to ensure they would continue to be highly ranked.
I can see how stack ranking would be disruptive, but often times disruption can be good thing. It actually makes sense to disperse a cluster of talented people who just delivered a successful project so that they move on to become team leaders on new projects with less experienced members.
"Do not seek to follow in the footsteps of the wise. Instead, seek what they sought." - Matsuo Basho
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