the old rule of thumb was to get rid of the bottom 5% every yearUnintended consequences ping.
Oddly enough, I have seen a real steady decline in how well people can collaborate. Some folks insist on being the star and want every decision made by the group to be the decision that seems personally best to them. "Compromise? Support others? Why would I do that?? We need to do it my way." Others, of course, want to kick back and let others do everything. "You guys are great. Keep doing what you're doing. I'll be over here surfing facebook."
It's hard to be a good leader. It is also hard to be a good follower. Collaboration is about knowing how to do both.
Collaboration is hard. You might think that schools teach people how to collaborate, but I think somehow the opposite lesson is being learned.
Slate, Vanity Fair..... outstanding sources for how to run a business.
Neither is worth the powder to blow it to hell
Like every idea, each is applicable in certain circumstances and not applicable in others.
Stack and Yank is good if you are turning around an old ossified company like GE was when Welch got it. It was filled with “deadwood” that needed to be cleared out and Stack and Yank applied.
But when you have a relatively young workforce in a young company like MS, there is not that much dead wood that needs to be cleared out.
The company I work for did this for about 10 years. The idea was cut from the bottom and add to the top. Everyone had to be ranked like in a totem pole, one higher or lower than someone else in your org. If you worked in an org of superstars you were in big trouble. I know alot of very good people who were let go because of it. They stopped about 10 years ago because everyone but HR hated it.
Very silly system.
Tech companies quite literally ARE their people and the innovations they produce. They have nothing else to sell. Sticking them into a somewhat toned-down version of Survivor is not a wise decision.
I use Openoffice and Codewrite and.... well, Microsoft’s products have been second rate about forever.
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.
the old rule of thumb was to get rid of the bottom 5% every yearVery 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’.
“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.
Intel did “Ranking and Rating” in the 1980s when I was there, from top to bottom. I was in HR and thought it was ridiculous.
If you have a bunch of people working well together, ranking them poisons the entire working relationship. With an absence of outside influences, top performers will seek each other out and group together. So, any "bell curve" would be skewed to the point that it is meaningless. The person at the bottom of the ranking in one of these groups would be the top person in most other groups.
If the hiring is done right, you don't have poor performers. And the few that sneak in are quickly identified. The key is to put the hiring decision into the hands of the people that will be working with the new employee. If you let HR make the decision, then they start filling "quotas", and you get people that can't make the grade.
In general, Ballmer's ideas about management would find no takers in that group; the ideas they were promoting were all pretty much 180-degrees opposed to what the article you've posted here describes.
Dude, everybody on the Internet knows how to run a multibillion dollah company like Apple, Microsoft, Kodak, GE.
It’s our loss that they are not running one.
A company's biggest threat is to long-term survival. This comes from sustainability - sustainability of products and services, but also of its corporate culture and processes.
The cited problem with Microsoft "rank and yank" is the focus on office politics, surviving in a team of top performers, and retribution from unscrupulous managers. The cited problem with Google/Apple is reliance on a single product, and if I may add, the risk of diverting focus to non-strategic activities.
The truth is that both approaches rely on the abilities of their people, and reward performance of individuals. The risk to survival is that people eventually leave through attrition or retirement. Companies that rely in the talent of individual contributors have a hard time replacing 25+ years of talent. Imagine the Chicago Bulls after Jordan retired, or the San Francisco 49ers after Montana and Young retired.
What companies are finding out is the need to replace individual performance with systems of process management, that is, get the expert knowledge out of the individual and into the process. The way to do this is to encourage and reward mentoring. This means changing the "rank and yank" to deemphasize individual contribution and reward teaching the next generation of worker. Doing that will lead to a collaborative workplace that doesn't lose focus on the corporate strategic goals.
-PJ
From yesterday's WSJ:
Microsoft remains a behemoth financially. It generated nearly $78 billion in revenue in the year ended June 30—an average pace of $150,000 worth of sales every minute. The company's fat profit, amounting to $21.86 billion last year, remains the envy of most industries.