Regina points us to a post by Robert Scoble – Microsoft’s unofficial but omnipresent blogger – on MS’s ditching if it’s forced ranking process.
“One big thing that’s gone? Stack ranking. No longer am I judged against Charles and Adam and Tina and Jeff. Now, either I’m doing a good job for Microsoft or I’m not and my review will now reflect that.”
I know Dick Grote think that forced ranking is great (I just saw him discuss the topic at World at Work in Anaheim) – at least for a period of time – so perhaps Microsoft’s forced ranking simply outlived it’s usefulness. Perhaps they culled enough low performers to start demotivating the people that were left.
Thoughts?
A number of companies have abandoned forced ranking, or rank and yank. Some have done so as a result of successful legal challenges, and others because it has unpleasant side-effects. With all due respect to my colleague, Dick Grote, forced ranking, even statistically speaking, and when it is done optimally, cannot possibly work over the long term.
It works if a) you have a low talent workplace, b) have a tool of replacement talent that can replace your poor talent, and c) have a selection process that has improved since you hired the poor talent.
As your talent improves your chances of hiring better replacements drops.
Aside from that, the side effects of yanking a certain percentage of people competitively are so severe that any improvements, even in the early stages, will be only transient. It’s also unfair.
I agree with Robert. Forced ranking creating an environment is distrust between co-workers as their demise can promote your chance of getting a better raise. This completely kills collaboration and team work. Without team work a big company loses it’s economy of scale. Instead of everyone working towards one goal (success for the company), it becomes working for only my success. The company becomes nothing more than a group of individuals competing in the same market place for limited resources. There is no reason for me to help Joe Blow because it will make him look good. It will only serve me if I make him look like a fool and delay his project. Sure the company will suffer this delay but I will get a better raise than him come review time. You take this and multiply it with the number of employees then you will have a failing company in no time.