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> It's looking more and more like the official reason for the layoffs - "…As with any company, especially one of over 33,000 employees, performance reviews also

> It's looking more and more like the official reason for the layoffs - "…As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures" - doesn't hold water. Why not? If you can't find 2% dead wood at your company you're miraculously good at hiring or are not looking very hard. Stack ranking companies tend to use 5-10% as the bottom tier subject to "yank". I'm not saying it is just performance reviews, because I have no more idea than whomever wrote the article what's really going on inside Tesla, but the idea that it couldn't make sense for a big employer like that to do a small round of firings doesn't hold water.

adamnemecek 9y ago
Stack ranking is stupid. Eventually you'll be firing good people. Idk why people think that Jack Welsh had good management practices or that GE is a company to aspire to. If nothing else, GE has 300k employees. Your company probably doesn't.
- Strom 9y ago
  > Eventually you'll be firing good people. Not good enough to be in the top 98% though! I think the issue here is that we don't have a good way to even assign ranks. It's either a social game of politics, or some sterile metric based system that no doubt prefers short-term gains over long-term investment. Thus there's no eventuality about it, you'll be firing all sorts of good people right from the get-go.
- ryanwaggoner 9y ago
  “Idk why people think Jack Welsh had good management practices...” Prior to Mr. Immelt GE was headed by Jack Welch. During his tenure at the top of GE the company created more wealth for its investors than any company ever in the recorded history of U.S. publicly traded companies. GE’s value increased 40-fold (4000%) from 1981 to 2001. He expanded GE into new businesses, often far removed from its industrial manufacturing roots, as market shifts created new opportunities for growing revenues and profits. From what was mostly a diversified manufacturing company Mr. Welch led GE into real estate as those assets increased in value, then media as advertising revenues skyrocketed and finally financial services as deregulation opened the market for the greatest returns in banking history. Jack Welch was the Steve Jobs of his era. Because he had the foresight to push GE into new markets, create new products and grow the company. Growth that was so substantial it kept GE constantly in the news, and investors thrilled. That’s why. Source: https://www.forbes.com/sites/adamhartung/2015/04/15/ge-a-total-leadership-failure/#7a43845b5699 https://www.forbes.com/sites/adamhartung/2015/04/15/ge-a-tot...
  - adamnemecek 9y ago
    Meh.
  - walshemj 9y ago
    Wasn't he disgraced for having a gold plated shower on his company jet?
    - ryanwaggoner 9y ago
      No idea. Also, you may be using “disgraced” a little liberally here. Pretty sure Welsh is still held in extremely high regard in the business world.
      - walshemj 9y ago
        Depends if you get caught the press and politicians can be brutal especially if the economy needs a whipping boy. See the presidents club furore in the UK some "well respected" business men are no longer held in such high regard.
        ryanwaggoner 9y ago
        Yes, but he clearly is held in high regard. So there may have been some dust up about that years ago, but no one really remembers or cares. I can’t even find any reference to it, so you may be thinking of someone else.
  - justin66 9y ago
    > During his tenure at the top of GE the company created more wealth for its investors than any company ever in the recorded history of U.S. publicly traded companies. GE’s value increased 40-fold (4000%) from 1981 to 2001. Management went from not being rewarded with significant stock options to owning a third of the company during that period, so "created wealth for investors" is a slippery term. > From what was mostly a diversified manufacturing company Mr. Welch led GE into real estate as those assets increased in value, then media as advertising revenues skyrocketed and finally financial services as deregulation opened the market for the greatest returns in banking history. And we all know how well that ended.
- walshemj 9y ago
  And not all 300k employees are doing the exact same job so stack ranking breaks down. You also get people gaming the system ie at Microsoft deliberately taking some one to a team to let them go. And I have heard terminally ill people being selected using these systems.
vkou 9y ago
Every company can stand to lose 10% of their bottom tier every year. The problem is that no company can accurately identify who the bottom 10% are. The other problem is that false positives in firing will cost you a lot more then just losing an average/good employee.
- danieltillett 9y ago
  This is true. The interesting thing is the people in the company know who the bottom 10% are, but there is no way for that information to get to management.
  - kasey_junk 9y ago
    I’ve worked in a wide variety of companies and environments and I don’t know that I’ve ever been in a position to think I could make an accurate assessment of what “rank” my colleagues were. The very idea sounds crazy to me.
    - danieltillett 9y ago
      Really? You aren’t able to determine out of the people you work with if they are performing or not? Sure you might not be able to determine who the bottom 10% is in the company, but you know who is pulling their weight and who is not of the people you work with.
      - kasey_junk 9y ago
        I’m able to determine when someone is struggling with a task or succeeding at it, but I’ve never seen a measure that would allow me to holistically rank them across the many & varied things we ask our colleagues to contribute to.
        danieltillett 9y ago
        Yes that is the problem. Everyone in the company knows collectively who the performers and non-performers are, but there is no way for that information to be captured in a useful form by management. Attempting to do so ends up with disasters like rank and yank.
protomyth 9y ago
Stack rankings other problem is it really puts a damper on team building. Why be on a team of amazing people when it very likely can cut your earnings or get you fired. Make sure your team has people who will get fired. Collaboration doesn't make a whole lot of sense in that environment.

adamnemecek 9y ago

Stack ranking is stupid. Eventually you'll be firing good people. Idk why people think that Jack Welsh had good management practices or that GE is a company to aspire to. If nothing else, GE has 300k employees. Your company probably doesn't.

Strom 9y ago
> Eventually you'll be firing good people. Not good enough to be in the top 98% though! I think the issue here is that we don't have a good way to even assign ranks. It's either a social game of politics, or some sterile metric based system that no doubt prefers short-term gains over long-term investment. Thus there's no eventuality about it, you'll be firing all sorts of good people right from the get-go.
ryanwaggoner 9y ago
“Idk why people think Jack Welsh had good management practices...” Prior to Mr. Immelt GE was headed by Jack Welch. During his tenure at the top of GE the company created more wealth for its investors than any company ever in the recorded history of U.S. publicly traded companies. GE’s value increased 40-fold (4000%) from 1981 to 2001. He expanded GE into new businesses, often far removed from its industrial manufacturing roots, as market shifts created new opportunities for growing revenues and profits. From what was mostly a diversified manufacturing company Mr. Welch led GE into real estate as those assets increased in value, then media as advertising revenues skyrocketed and finally financial services as deregulation opened the market for the greatest returns in banking history. Jack Welch was the Steve Jobs of his era. Because he had the foresight to push GE into new markets, create new products and grow the company. Growth that was so substantial it kept GE constantly in the news, and investors thrilled. That’s why. Source: https://www.forbes.com/sites/adamhartung/2015/04/15/ge-a-total-leadership-failure/#7a43845b5699 https://www.forbes.com/sites/adamhartung/2015/04/15/ge-a-tot...
- adamnemecek 9y ago
  Meh.
- walshemj 9y ago
  Wasn't he disgraced for having a gold plated shower on his company jet?
  - ryanwaggoner 9y ago
    No idea. Also, you may be using “disgraced” a little liberally here. Pretty sure Welsh is still held in extremely high regard in the business world.
    - walshemj 9y ago
      Depends if you get caught the press and politicians can be brutal especially if the economy needs a whipping boy. See the presidents club furore in the UK some "well respected" business men are no longer held in such high regard.
      - ryanwaggoner 9y ago
        Yes, but he clearly is held in high regard. So there may have been some dust up about that years ago, but no one really remembers or cares. I can’t even find any reference to it, so you may be thinking of someone else.
- justin66 9y ago
  > During his tenure at the top of GE the company created more wealth for its investors than any company ever in the recorded history of U.S. publicly traded companies. GE’s value increased 40-fold (4000%) from 1981 to 2001. Management went from not being rewarded with significant stock options to owning a third of the company during that period, so "created wealth for investors" is a slippery term. > From what was mostly a diversified manufacturing company Mr. Welch led GE into real estate as those assets increased in value, then media as advertising revenues skyrocketed and finally financial services as deregulation opened the market for the greatest returns in banking history. And we all know how well that ended.
walshemj 9y ago
And not all 300k employees are doing the exact same job so stack ranking breaks down. You also get people gaming the system ie at Microsoft deliberately taking some one to a team to let them go. And I have heard terminally ill people being selected using these systems.

vkou 9y ago

Every company can stand to lose 10% of their bottom tier every year. The problem is that no company can accurately identify who the bottom 10% are. The other problem is that false positives in firing will cost you a lot more then just losing an average/good employee.

danieltillett 9y ago
This is true. The interesting thing is the people in the company know who the bottom 10% are, but there is no way for that information to get to management.
- kasey_junk 9y ago
  I’ve worked in a wide variety of companies and environments and I don’t know that I’ve ever been in a position to think I could make an accurate assessment of what “rank” my colleagues were. The very idea sounds crazy to me.
  - danieltillett 9y ago
    Really? You aren’t able to determine out of the people you work with if they are performing or not? Sure you might not be able to determine who the bottom 10% is in the company, but you know who is pulling their weight and who is not of the people you work with.
    - kasey_junk 9y ago
      I’m able to determine when someone is struggling with a task or succeeding at it, but I’ve never seen a measure that would allow me to holistically rank them across the many & varied things we ask our colleagues to contribute to.
      - danieltillett 9y ago
        Yes that is the problem. Everyone in the company knows collectively who the performers and non-performers are, but there is no way for that information to be captured in a useful form by management. Attempting to do so ends up with disasters like rank and yank.

protomyth 9y ago

Stack rankings other problem is it really puts a damper on team building. Why be on a team of amazing people when it very likely can cut your earnings or get you fired. Make sure your team has people who will get fired. Collaboration doesn't make a whole lot of sense in that environment.