Found an article in Bloomberg.com – number one on their list of 10 Management Practices to Axe is a good one -
Forced Ranking
The idea behind forced ranking is that when you evaluate your employees against one another, you’ll see who’s most critical on the team and who’s most expendable. This theory rests on the notion that we can exhort our reports to work together for the sake of the team 364 days a year and then, when it really counts, pit them against one another in a zero-sum competitive exercise. That’s a decent strategy for TV shows such as Survivor but disastrous for organizations that intend to stay in business for the long term. What to do instead: Evaluate employees against written goals and move quickly to remove poor performers all the time (not just once a year).
Forced ranking is something most managers are asked to do if they’re in the game long enough, and it’s so ingrained in many corporate cultures that it takes some backbone to resist. When John was managing a technology group several years ago, he had the opportunity to supervise a fantastic group of people. He ranked them all “outstanding” and was told by his manager that he couldn’t do that. It took quite some doing to convince the heirarchy that they really WERE all outstanding, and to play silly games with HR to make it everyone’s evaluations come out accurate and fair.
The only possible result from people who actually DO forced rankings are these:
Option One – Your people step on each other climbing the “ladder” and currying favor.
Option Two – Decent employees who refuse to participate in Option One start devoting their energy to looking for work in a more cooperative environment.
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Forced Ranking alone, especially in the wrong hands, is a dangerous strategy. The flip side is most managers do not have the backbone to give candid appraisals so slackers are not culled and middle performers are not given the feedback needed to become superstars. There is only one thing worse than a highly competitive work environment where teamwork is low; a complacent environment where slackers get the same reward as winners. This brings the winners down to the level of the slackers and the whole organization suffers.
This Business Week article cites a study showing that Forced Ranking does has a huge payoff in the beginning but the return quickly diminishes after year 3.
http://www.businessweek.com/magazine/content/06_02/b3966060.htm
As with all things, taking something to an extreme is dangerous. Appraisals must be candid with categorization of performance but, as you stated, there must be the flexibility for a team with all winners to exist. A little competition combined with candid feedback and a strong support system is better than any single minded Forced Ranking strategy.
I have always had a problem with the competitive “individual” approach seen so often in the west. Though I am an American, I see too much of this “climbing the ladder” at everyone else’s expense. Work and productivity assessment is important, yes. Getting rid of slacking off is too.
But I like the Japanese approach, where teamwork is almighty. The “rankings” and “assessments” have to do with group or team productivity. That is a huge incentive for the team to keep each other motivated, productive and efficient. When the team is prosperous, all members are. And, it provides for support rather than debilitating competition.
Like in baseball, it is the success of the group, and the support of the group, that wins ball games. That builds camaraderie, and the incentive to go further.
If the group screws up, then they have the support of each other to do it better next time. In an individualistic approach, one person gets shafted, talent and all; there is no where to go beyond that. He loses; she loses; the group loses.
No, this “ranking” system is NOT productive. People are more worried about their own skin than the betterment of the group as a whole. It needs to go. And managers who think this builds fiber in the corporate structure need to go, or have their objectives re-examined.
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knives,swords and blades
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The amazing thing is that some companies who exercise this kind of short-sighted policy still manage to be successful.
No kidding! How does that happen? Do these things work or do they have enough other factors going for them that they can get away with some bad management?
There was no shortage of business boneheads around the world in 2011 but Off the Wall decided to reflect on the 10 biggest blunders in the US during the year.