The stack ranking system is really known as the "GE Way" and is one of the reasons Jack Welsh is famous and made a ton of money selling management books.
IBM also employed the 20/70/10% concept to employee reviews in the 90s.
IBM also employed the 20/70/10% concept to employee reviews in the 90s.
For anyone who hasn't seen the movie: it doesn't end well.
With respect to employees, the point of a "forcing function" has less to do with motivation than with finding some way to make change possible in a crumbling organization of fiefdoms whose managers insist that, nevertheless, "all my children are above average." If I recall correctly, Welch even points out that "C" players often go on to be "B" or even "A" players in other organizations, which doesn't change the fact that everyone can't be doing everything right when the overall organization is underperforming, so there are either weak spots, or no alternatives to immediate liquidation.
Finally, I'm quite confident Welch would agree that "blindly applying a vague principle you read in some book, then sticking with it for years because 'it worked for $MEGACORP'" is a stupid idea, regardless of who wrote the damn book!
It's worth noting that Welch himself almost got fired from GE early in his career-so he knows that performance evaluations aren't 100 just!
Therefore if a manager plays politics and promotes his inefficient pets, sooner or later he comes ranked last among his peers. So if though he wants, he can't.
He also says that the stack ranking system makes it very difficult for the managers in the 3-4 year after it was implemented, because now they may have to let go some good people to retain the very best.
However it did work to a large extent in GE. Jack Welch's immediate reportees all went on to become CEO's of top companies.
But things like this blind copied and applied don't fly much. You need to implement them in spirit and that's difficult.
Also stack ranking requires a great leader with courage in the top who actually has the vision to take things down to the last employee. For this you need to cut bureaucracy, bring in meritocracy. And do nearly every thing your traditional exec can't.
The reason this fails is some clueless MBA's in the name of case studies take it up and blindly without knowing the spirit behind it apply to anything and everything under the sun.
Each leader has his style you can take some lessons from it. But you can't be that leader copy cloned and template act everything he did. When you do, you only do it ritually and not in spirit.
Which is what cause things like Stack Ranking to no be viable else where. Because you are not thinking as Jack Welch did, you are trying to imitate his action and hope to get the same results.
Another problem with any ranking system is that a ranking is static but actual performance is fluid. Just look at K1 results and then look at the records of the fighters. They've all fought each other and they've all lost to each other. So Hoost was better than his peers four times, but he also lost to those same people. You can say he is better in "win points", but this would never help you predict if he would win his next fight.
I can assure you that this description of the system doesn't begin to describe the hilarity involved. Any system where you have people proud to be ignorant of what their subordinates doing then being tasked to do meaningful evaluations is nonsensical in my mind. I guess its a 'growing pain' ... like how a heart attack is a growing pain.
What I saw was 95% of the middle management layer was thick. Practically of no use, and acted nothing more than an inefficient communication buffer between higher management and devs. They treated developers like tissues, choking innovation at every level. To make it look as though programmers are useless bunch of lot, and whatever good is happening in the organization it was because of them. The qualification of most these managers at best described was 'can write emails'.
Performance evaluation in such companies is a joke, Only managers pets get promoted. And company functions like gangs working for their survival rather than for the company.
I couldn't imagine anything worse that the Stalinistic "360 degree" reviews I've experienced. I was wrong.