the old rule of thumb was to get rid of the bottom 5% every year
Posted on 08/25/2013 6:24:11 AM PDT by SunkenCiv
There were many reasons for the decline of Microsoft under Steve Ballmer, including, as I wrote this morning, its lack of focus and its habit of chasing trends rather than creating them. But one that’s not obvious to outsiders was the company’s employee evaluation system, known as “stack ranking.” The system—and its poisonous effects on Microsoft’s corporate culture—was best explained in an outstanding Vanity Fair feature by Kurt Eichenwald last year...
So while Google was encouraging its employees to spend 20 percent of their time to work on ideas that excited them personally, Ballmer was inadvertently encouraging his to spend a good chunk of their time playing office politics. Why try to outrun the bear when you can just tie your co-workers' shoelaces?
Microsoft wasn’t the first company to adopt this sort of ranking system. It was actually popularized by Jack Welch at GE, where it was known as “rank and yank.” Welch defended the practice to the Wall Street Journal in a January 2012 article, saying, “This is not some mean system—this is the kindest form of management. [Low performers] are given a chance to improve, and if they don't in a year or so, you move them out. "
As the Journal and others have noted, what seemed to work for Welch—for a time, anyway—has produced some ugly results elsewhere. Even GE phased the system out following Welch’s departure.
(Excerpt) Read more at slate.com ...
It didn’t work 40 years ago, and won’t work now.
College professors are supposed to be at LEAST “Moderately” intelligent! LOL.
You never know when or where you’ll find an interesting tidbit. It’s still a matter of finding a needle in a haystack sometimes even when the haystack is named Vanity Fair.
I don’t subscribe to as many magazines as I did long ago. I still look at them on the newsstand or library to figure out which issues might have something interesting. Most don’t. It doesn’t take long to look at the index and scan an article for merit.
I view it as part of continuing education Even Vanity Fair has had a few worthwhile articles over the years.
“The company I work for did this for about 10 years”
Ok, but in the first 2 years, was this good ?
I suspect it was as the competent people stayed and the deadwood got cleared out.
After that, the dog eat dog atmosphere probably was detrimental.
All “Rank & Yank” does is tell managers they do not have to manage or terminate bad employees they only have to rank someone low and HR will yank them out. Star performers that are threats to their managers are routinely ranked low so that they are terminated.
“Jack Welcch is a 24x7x365 d*ck. Not only did he poison the culture at GE he was the pioneer of outsourcing “
Jack Welch kept GE from becoming Eastman Kodak and made it into a great US company again.
Oh, btw, iPhone sales have started to decline, and Apple doesn’t really have anything new and improved where it can keep the competition at bay.
Meanwhile, Microsoft is the only company with 16 products and services that produce more than $1 billion in revenue per year. I’d say that’s a company with a much better foundation going forward than Apple or Google.
“The problem with these systems is that it isn’t always excellence that is rewarded, more political skill”
There was a show “the weakest link” where a group of contestants filled a pot with money by answering the right questions. After each round , they voted off the weakest link. At the end, one person took home the pot of money.
In the early rounds, they did vote off the weaker players to get more money in later rounds.
But in the last few rounds, they started voting off the strongest player to eliminate competition.
I love Windows 8 for the laptop. I guess I must be the only one.
the old rule of thumb was to get rid of the bottom 5% every year
Very interesting
This happened to me several years ago. I was an employee at a major computer company for 25 years. I was usually evaluated as a 1 or a 2 performer. I transfered, within the same company, to another site into a group of 1 performers. Since I was new to the department and had the timing misfortune of joining the department during a ‘ranking’ session, I was ranked at the bottom and ‘yanked’.
The manufacturer I worked for had an interest twist to that idea. The sales staff (of which I was one) was instructed to set-aside its loyalty to the company, and instead act as advocates for the company's customers. Open hostility to the marketing manager and the bean-counters was encouraged (I need to add that arguments usually were not about pricing--we all knew that our bonus was tied to profit).
Like I said, interesting because I had never experienced something like it before, and might not again. The company was #1 in the industry.
“All “Rank & Yank” does is tell managers they do not have to manage or terminate bad employees they only have to rank someone low and HR will yank them out. Star performers that are threats to their managers are routinely ranked low so that they are terminated.”
Please see post 28 on the game show “the weakest link”
Thank you.
“this sort of ranking system. It was actually popularized by Jack Welch at GE, where it was known as “rank and yank.”
This is a misappropriation of the first order! The true inventor of this evil ranking system was JD Rockefeller of Standard Oil. His grim “Rating and Ranking System” is still practiced ruthlessly at ExxonMobil.
Yeah, and so did Kodak.
I worked in this area for many years. You are exactly right. IBM needed this approach in the 80s. Most Government Bureaucracies could do with it for 5 years or so.
However, stack and yank seldom works for more than a few years before you start eliminating talent, eroding morale and diluting productivity since it is frequently predicated on the organizations ability to recruit equivalent or better talent. Most importantly it is designed to force weak managers to do a better job evaluating their own reports. If you don’t make sure that you first get rid of weak managers you will end up perpetuating performance weaknesses. A lot of schools suffer from this problem. Weak principals keep weak teachers and drive out the stronger teachers that threaten them: Fish rot from the head.
Very wise comments. These systems might work if performance was unambiguous, such as in a track and field 100 yard dash competition. You can definitely rank the participants in that race, provided they were all in good health that day. However, can you compare the sprinters to the distance runners? If you cut the slowest in each group, did you really cut the lowest two performers for the team as a whole? If you include enough small groups in the overall cutting process, you will make several wrong cuts and keep some performers who werent’ as good.
When you start ranking people who do tasks that are difficult to measure, such as design or innovation work, you start falling into decisions made on the basis of liking someone. Someone might not be an extrovert, but could be an excellent, innovative engineer. Then there are people who work on pharmaceutical development and who may take many years to identify a successful drug. How are you going to clearly assess their performance over the early years?
These types of systems are for managers who want simple systems for making tough decisions, thus absolving the managers of personal responsibility for making the decision. HR managers like these systems ‘cause they are simple, quantitative systems and require no real thought. HR managers don’t even work alongside the employees being evaluated.
You are pretty much describing the electric paower systems lab group I was in when I was in college. Two members of the four person group I was in I call “Captain Head” and the “Stomed Ranger” since they liked to partake in a lot of weed. The course was on a Monday morning, so you can accurately guess what state they were in (and we’re working with 480 volt 3 phase, and it’s amazing no one got killed!). When it was time to do the group lab report, instead of meeting a t the agreed upon time and place, Head and Ranger were at the Student Center playing pinball. When the other lab group member and I reminded them of the shared responsibility, we get called before counseling services to get lectured about tolerance - as in we were suposed to accept people showing up stoned.
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