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The worst is when corporate decides in advance that a certain distribution of rankings needs to be done, so managers need to give average and poor ratings to so

by rpledge 17y ago

The worst is when corporate decides in advance that a certain distribution of rankings needs to be done, so managers need to give average and poor ratings to some of the team regardless of if the employees really deserve it. By having a fixed distribution isn't management pre determining that a certain percentage of the employees are sub par performers? If they believe that's the case shouldn't they be actively trying to solve that problem? Shouldn't they expect everyone to be giving outstanding performance?

pw0ncakes 17y ago
This reminds me of the experiences of GE under Jack Welch, with his "rank-and-yank" initiative: 10 percent, each year, gets fired. It relies on the faulty assumption that the percentage of good vs. bad employees is constant. First year, you can fire 10% without much complaint, because most of the people you're getting rid of are deadwood. Second year, it's a bit harder. Third year, the obvious deadwood is gone and nobody wants to lay off 10% of their workers. This is when people start getting pissed off. The enforced rank distribution is just there to make it easier to fire people. They're afraid of termination lawsuits that might occur if someone gets fired with a trail of 4s and 5s.
- j_baker 17y ago
  Not coincidentally, Enron also used this model. I think that this is the worst idea possible. It encourages employees to compete with one another rather than working as a team.
  - pw0ncakes 17y ago
    Enron is an energy company that decided it wanted to be a Wall Street firm-- a trader rather than a maker. The problem is that it didn't have the cultural "memory" that most banks have-- that prevents them from doing outrageously stupid and illegal things (that people in the banks would also love to do if they were profitable, but history has shown to be bad ideas). So Enron became an outlandish caricature of Wall Street.
- Hoff 17y ago
  Gigantic-scale businesses are different than startups, and with different problems and different avenues and different dynamics. As troubling as I find management built on an up-or-out career treadmill and deliberately roiling the employees and the bungee-bosses and the management schools, these are a counterintuitive and cut-throat and effective way to keep the management and the organizations from getting complacent. Commission sales folks are accustomed to the up-or-out model, too. This doesn't scale down to smaller businesses nor to startups, nor is it usually particularly necessary. And for all the reasons discussed elsewhere in replies elsewhere here. But the dynamics in bigger organizations are different than smaller ones. (And no, I never thought I'd be sort-of defending this approach, either.)
ig1 17y ago
Well statistically half your employees by definition are sub-par. The reasoning behind getting rid of the bottom 10% is that chances are the new hires you make are going to be on average better than the ones you fired. The overall impact of the process should be that the average performance goes up every year. Trying to change a D player into A player is much harder than just hiring an A player in the first place. Hence the fire/hire approach. Of course the only way this works is if the people you hire are better than the people you just fired. Ideally firing the worst people improves the reputation of your company, so when you come around to hiring more better people want to work for you (the management consultancies like McK and BCG are good examples of this in practice) so you get better. But if you can't hire replacements better than the people you fired, that's when you need to stop the practice.
- nagrom 17y ago
  "Well statistically half your employees by definition are sub-par." Not at all. First of all, 'par' doesn't mean the average of the skill levels of your employees. 'Par' could be 'satisfactory' or 'the average skill level of the market as a whole'. Your own employees should not be a random sample of the market - otherwise why do you have a hiring process? Your employees should be above average - otherwise your hiring process needs improvement. And if you have a stand-out performer at either end of the scale, then that will skew the distribution. Thoughts: If you couldn't hire an A player in the first place, maybe you should think about replacing your hiring process or look to make improving people a strength? This improvement may even pay off on your hiring process in the future! It's difficult/impossible to judge the effect on a group dynamic that one person can have by any realistic rating system. Whatever system you choose will have exceptions and problems and you'll do some damage to your organisation by following it. "But if you can't hire replacements better than the people you fired, that's when you need to stop the practice." No, I disagree. Firing people and hiring them has cost. Your true indicator is 'if the risk of damage to your business caused by churning your employees and potentially not replacing them with much better candidates represents a larger lost profit than improving your staff (cheaper than hiring new), then you should stop trying to manage by silly quantitative rules and display the judgment and management for which you profess expertise.

by rpledge 17y ago

pw0ncakes 17y ago

This reminds me of the experiences of GE under Jack Welch, with his "rank-and-yank" initiative: 10 percent, each year, gets fired. It relies on the faulty assumption that the percentage of good vs. bad employees is constant. First year, you can fire 10% without much complaint, because most of the people you're getting rid of are deadwood. Second year, it's a bit harder. Third year, the obvious deadwood is gone and nobody wants to lay off 10% of their workers. This is when people start getting pissed off. The enforced rank distribution is just there to make it easier to fire people. They're afraid of termination lawsuits that might occur if someone gets fired with a trail of 4s and 5s.

j_baker 17y ago
Not coincidentally, Enron also used this model. I think that this is the worst idea possible. It encourages employees to compete with one another rather than working as a team.
- pw0ncakes 17y ago
  Enron is an energy company that decided it wanted to be a Wall Street firm-- a trader rather than a maker. The problem is that it didn't have the cultural "memory" that most banks have-- that prevents them from doing outrageously stupid and illegal things (that people in the banks would also love to do if they were profitable, but history has shown to be bad ideas). So Enron became an outlandish caricature of Wall Street.
Hoff 17y ago
Gigantic-scale businesses are different than startups, and with different problems and different avenues and different dynamics. As troubling as I find management built on an up-or-out career treadmill and deliberately roiling the employees and the bungee-bosses and the management schools, these are a counterintuitive and cut-throat and effective way to keep the management and the organizations from getting complacent. Commission sales folks are accustomed to the up-or-out model, too. This doesn't scale down to smaller businesses nor to startups, nor is it usually particularly necessary. And for all the reasons discussed elsewhere in replies elsewhere here. But the dynamics in bigger organizations are different than smaller ones. (And no, I never thought I'd be sort-of defending this approach, either.)

ig1 17y ago

Well statistically half your employees by definition are sub-par. The reasoning behind getting rid of the bottom 10% is that chances are the new hires you make are going to be on average better than the ones you fired. The overall impact of the process should be that the average performance goes up every year. Trying to change a D player into A player is much harder than just hiring an A player in the first place. Hence the fire/hire approach. Of course the only way this works is if the people you hire are better than the people you just fired. Ideally firing the worst people improves the reputation of your company, so when you come around to hiring more better people want to work for you (the management consultancies like McK and BCG are good examples of this in practice) so you get better. But if you can't hire replacements better than the people you fired, that's when you need to stop the practice.

nagrom 17y ago
"Well statistically half your employees by definition are sub-par." Not at all. First of all, 'par' doesn't mean the average of the skill levels of your employees. 'Par' could be 'satisfactory' or 'the average skill level of the market as a whole'. Your own employees should not be a random sample of the market - otherwise why do you have a hiring process? Your employees should be above average - otherwise your hiring process needs improvement. And if you have a stand-out performer at either end of the scale, then that will skew the distribution. Thoughts: If you couldn't hire an A player in the first place, maybe you should think about replacing your hiring process or look to make improving people a strength? This improvement may even pay off on your hiring process in the future! It's difficult/impossible to judge the effect on a group dynamic that one person can have by any realistic rating system. Whatever system you choose will have exceptions and problems and you'll do some damage to your organisation by following it. "But if you can't hire replacements better than the people you fired, that's when you need to stop the practice." No, I disagree. Firing people and hiring them has cost. Your true indicator is 'if the risk of damage to your business caused by churning your employees and potentially not replacing them with much better candidates represents a larger lost profit than improving your staff (cheaper than hiring new), then you should stop trying to manage by silly quantitative rules and display the judgment and management for which you profess expertise.