Employee Evaluation Systems

Now we are in the fourth quarter and the most dreaded employee event is upon us.  The annual review!  You know the conversation or monolog about how you did or didn’t do well at your job this past year.  Lovely.  There is so much to assail when reviewing the review process…does anyone actually formally review the review system?  Generally, we keep what we have, for the fear of the unknown is a powerful deterrent to change.

year end reviewAbout 12 years ago, I was in the midst of inventing the IPAD (The Individual Performance and Development) Review tool for a local organization with about 12,000 lucky employees.  During our research, we uncovered a fairly common practice by some very reputable organizations.  The practice was to stack rank employees—similar to a Class Rank system currently used in schools.  Often times, these organizations would then cut the bottom 10% of the stack’s ranked list.  This practice was outlined in exquisite detail in a Management book of the late ‘90’s.  It sounded like a good idea until the fired employees got together and noticed some common trends in their ranks —mainly they were part of a couple of protected classes.  Oops.

Unfortunately, these practices have not ended.  Let me start by saying, I think Microsoft could have used my help.  I could have explained to Microsoft’s management that stack ranking employees from best to worst is not a good idea. It does not increase revenue and does not foster collaboration.

In Tales of an Ex-Microsoft Manager on Slate.com, David Auerbach details the stack ranking first hand:

“Each report’s name was written on an index card and put on the table. It was a two-step process. First, reports were broadly sorted into four buckets: excellent, good, mediocre, and awful. Then, within each bucket, people were paired for comparison and bubbled up or down. Managers would argue whether a particular report was better or worse than some other manager’s report in the same bucket. Our manager would adjudicate the debates. Some managers were better fighters than others.”

For those of us who understand human behavior and alignment, we know that it’s possible to have a great place to work and get financial returns without incongruent people practices like this.

When employees were interviewed, they spoke about withholding information to set themselves up and conversely preventing their colleagues from getting recognition.  With stack ranking, you create a company of me, not we.  What should come, as no surprise is that collaboration gets minimized and innovation suffers.

This year put your Review under review.  If it includes peer feedback and no stacked ranking, you are on the right path.

Blogging by J. Forrest

2 thoughts on “Employee Evaluation Systems

  1. What a fantastic post. Unfortunately the man in charge at Microsoft at the time this system was implemented is now trying to do the same thing in education.

  2. Thanks J. Stacked ranking sounds like the Jack Welch approach

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