I am not sure why M$ is singled out for this "Stack Ranking" practice. While in reality every big company has implemented some or other variation of this system.
G# and particularly Jack Welch was the one who first introduced this system en masse. Even he, IIRC, did say that, this Forced Ranking (as it was called), system should be more of a short term thing where in you clean the system of the non-performers (how can someone identify justly and accurately is a question) and do not enforce this once it has run its course (3-5 years). Everyone attributed the success of the G#'s northward share prices during his reign to this "performance culture". If there was any truth in that approach, only it has not sustained after Immelt took over.
Even I>M follows this so called "bell curve" based assessment. Every manager should strictly adhere to the skew in his department, down to the smallest of teams.
With this being essentially a HR question for decades to solve, with so many people graduating with MBA HRs and Ph.Ds, I am surprised at the lack of progress or do not know of any alternative system being implemented in a big company successfully.
The normalization which is done at these companies make a mockery of sound statistical principles. A bell curve is forced on even the smallest of teams rather than letting a pattern emerge with very large populations where the distribution is in a shape of a bell curve.
e.g., In a particularly bad year, in a sales team of 10 people the guy/ girl who sold a 50 mill USD as opposed to a top ranker who has done a 150 million is rated bad and equated with some body who wrote 1000 lines of code and his project got cancelled (Note: Project could have got cancelled for any reason, not necessarily and least likely because of the code he wrote). A person who wrote 1000 loc and showed off (read:built visibility with managers who decide his fate on the rating discussions) could easily get a better rating. The whole system goes around a) building perception b) taking credit for success c) pushing responsibility for failure onto someone else. People become paranoid. Nobody shares information with any one else which would help the other guy get a better rating. The organization suffers as a result.
Despite all this and despite Edward Deming's call decades ago to abolish this rating system as one of his 14 principles, I have not seen a successfully implemented system which replaces this Darwinistic one. Does anybody have any examples of better systems or better implementations in organizations?
With this being essentially a HR question for decades to solve, with so many people graduating with MBA HRs and Ph.Ds, I am surprised at the lack of progress or do not know of any alternative system being implemented in a big company successfully.
Because the current system benefits the managers, the MBAs, and HR consultants just fine.
The more energy you have to put into such a competition, the more you'll get out of it. Managers spend more time learning and playing the game, by definition. Since it's engineered as a zero-sum game, compounding benefits accrue to those in inverse proportion to the time they actually spend creating externally-meaningful value for the organization.
No sorry all those companies don't practice Welch's stack ranking methods.
As per the Welch system, if each manager cuts down 10% of his under performing team. The managers themselves get stack ranked in their managers staff all the way up to the CEO. There fore managers themselves get ranked and cut. But that is not what we see most companies. In many of those companies the axe falls only on people working on grass root levels. And the managerial layers get thicker and thicker and years pass by.
Also for this you need a very good leader at the very top who can drive this. Jack Welch could do it because its his system. Other just do it because they have to.
I worked for G# before and it did not happen that way. Managers did not get stack ranked. Every manager had a mandate to push 10% or 5% of their team as bottom 10 or 5. And, I should add that this was may be because, it was in the IT side and they did not have the luxury of letting go of people. So the bottom 5/ 10% was not moved out. They were handed a rating and the performance improvement plan that goes along with that.
G# and particularly Jack Welch was the one who first introduced this system en masse. Even he, IIRC, did say that, this Forced Ranking (as it was called), system should be more of a short term thing where in you clean the system of the non-performers (how can someone identify justly and accurately is a question) and do not enforce this once it has run its course (3-5 years). Everyone attributed the success of the G#'s northward share prices during his reign to this "performance culture". If there was any truth in that approach, only it has not sustained after Immelt took over.
Even I>M follows this so called "bell curve" based assessment. Every manager should strictly adhere to the skew in his department, down to the smallest of teams.
With this being essentially a HR question for decades to solve, with so many people graduating with MBA HRs and Ph.Ds, I am surprised at the lack of progress or do not know of any alternative system being implemented in a big company successfully.
The normalization which is done at these companies make a mockery of sound statistical principles. A bell curve is forced on even the smallest of teams rather than letting a pattern emerge with very large populations where the distribution is in a shape of a bell curve.
e.g., In a particularly bad year, in a sales team of 10 people the guy/ girl who sold a 50 mill USD as opposed to a top ranker who has done a 150 million is rated bad and equated with some body who wrote 1000 lines of code and his project got cancelled (Note: Project could have got cancelled for any reason, not necessarily and least likely because of the code he wrote). A person who wrote 1000 loc and showed off (read:built visibility with managers who decide his fate on the rating discussions) could easily get a better rating. The whole system goes around a) building perception b) taking credit for success c) pushing responsibility for failure onto someone else. People become paranoid. Nobody shares information with any one else which would help the other guy get a better rating. The organization suffers as a result.
Despite all this and despite Edward Deming's call decades ago to abolish this rating system as one of his 14 principles, I have not seen a successfully implemented system which replaces this Darwinistic one. Does anybody have any examples of better systems or better implementations in organizations?