This not only feels unfair for the employee, it is deeply uncomfortable for the line manager. Sarah Nickson, a researcher at the Institute of Government think-tank, said the UK government’s “deep dive” into the forced distribution system for civil servants found that “a lot of the people in the bottom 10 per cent were not underperforming”. You might be meeting all your objectives, for example, yet still be ranked bottom and labelled “underperforming” in a strong team. The big problem is that it mixes up someone’s absolute performance with their relative performance against their peers. “In that context you really need to know if you’re in the 25th percentile or 75th percentile,” he told me.īut there are many more examples where the method fails, even on its own terms. One former accountancy trainee said he had only been willing to tolerate the long hours and grinding work if he was likely to be promoted. But somehow adults can’t take it? Explain that one to me.” “We grade children in school, often as young as nine or 10, and no one calls that cruel. Jack Welch, former chief executive of General Electric, said in 2013 he couldn’t understand why people thought this is cruel. The idea is to avoid “grade inflation” and force managers to have honest conversations with people who are sub-par. In the United Kingdom’s senior civil service, for example, the proportions were fixed at 25, 65 and 10 per cent respectively, until the system was reformed in 2019. Generally speaking, “forced distribution”, or “stack ranking”, methods divide employees each year into a certain percentage of top performers, average performers and underperformers. No matter how many times it proves disastrous for a company’s culture or morale, it refuses to die. This way of appraising people is a zombie idea. Subscribe now to the Blogs Newsletter for a daily summary of the most recent and relevant blog posts at Computerworld.When Bill Michael, the former chair of KPMG, told staff to “stop moaning” in a virtual meeting in February, one of the issues they were complaining about was the “forced distribution” model used to assess their performance. So, employees will not know where they stand relative to others when they see their bonus check. That being said.what will probably happen is a kind of stack ranking that is less transparent. This also fosters bureaucracy and politics. The longer your tenure in a group, the higher your rating is likely to be because you perform better when you know the ropes. is good for justifying the elimination of bad employees, but overall there are better ways to evaluate performance and offer rewards.that’s counter to business goals.Īnother bad consequence that it would discourage risk-taking by incentivizing employees to stay in their current group. MOREīut this pseudonymous ex-Microsoftie isn't so sure the new way will be better: Everyone admitted that the entire system was pants. a litany of complaints about the stack-ranking system and complained that Redmond was losing talented people. The system turned into a nest of backstabbing and conspiring, where tongues had to be so far up the bottoms of management, it was possible to lick a manager's frontal lobe. While Edward Berridge puts it more colorfully: The move comes as Microsoft continues to restructure around the new "One Microsoft" strategy that was recently introduced by outgoing CEO Steve Ballmer. Vanity Fair magazine went as far as to blame stack ranking for what it called "Microsoft's lost decade.". But the policy won few accolades as it was implemented at Microsoft, with critics charging that it drove talented employees away labeling them as underperforming and forcing them to focus on competing with their peers. Stack ranking has its origins with General Electric in the 1980s under CEO Jack Welch. Microsoft may soon be a much nicer place to work. Microsoft has a sometimes brutal corporate culture, and has chewed up and spit out more than its share of talented people who got caught in turf wars and cross-fires. So Preston Gralla explains why it's significant: Lisa Brummel, Microsoft’s head of human resources “We will continue to invest in a generous rewards budget, but there will no longer be a predetermined targeted distribution” there will be “no more ratings.” MORE Even if all members of a team performed well.the manager was required to designate a set percentage as underperformers. Managers each year were required to put set percentages of their team’s employees into one of five groups affected everything from promotions to bonuses. Its controversial stack-ranking review system has long been the object of critical barbs by those who believe it lowered employee morale and stymied innovation.
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