What's the worst thing that happens? You get let go? What a great way to get let go from a dysfunctional company.
- Trying to bulk-remove low performers is doomed to failure, don't try
- Bulk-remove on something else, like what projects you worked on instead of your rating
- Let them rank as high as they want, then let the bottom N% go regardless of whether they were technically rated "meets expectations"
- Some solution I'm not seeing?
This is an honest question -- I've never run (or worked for a long time) a company as big as Yahoo.
At Twitch, this isn't a problem because you don't have many layers of management and the number of people is small, so it's easier to get consensus on what acceptable performance is across the entire organization. But I really have no idea how you'd manage that somewhere like Yahoo.
If this isn't a one-time thing and Yahoo is moving to a permanent stack-ranking system...nevermind everything I said. But stack-ranking seems like a reasonable one-time way to cut deadwood in a very large company.
[1] And maybe in general, I'm just only experienced with software companies.
This was only supposed to last as long as required to turn GE around. Like all good fads in the business world, though, it was taken too far by the MBA crowd. They now see stack ranking as a great permanent solution to deadwood. They fail to recognize that: 1) all organizations have a certain minimum amount of deadwood, as a function of their size; 2) once an organization approaches its natural level of deadwood, stack ranking hurts more than it helps.
My feeling is that generally a group knows who sucks or is disruptive, and this is probably the most reliable data source. That's your scoring criteria. Other modifications I might make:
1. flatten the org chart for the purposes of ranking. 2. employees rank best and worst fellow employees, i.e. up to 10 best, up to 10 worst. 3. ranking is two-dimensional to distinguish between "this person is terrible and should be fired" from "this person isn't a good fit/being utilized well and should be moved". 4. Do the above and see if the results can be used to determine who should be fired. 5. If you want to repeat this process every year don't set forced quotas.
Also, if I remember correctly, MS employees might have had some say in their peer's rank, but then groups scores would be merged with other groups by having managers "calibrate" with each other, which more than likely gives the manager a lot of control in the final outcome.
I'd make the system ignore the scores of any bottom ranked management.
Like fingernails. You never cut the fingernail right up to the quick, you always leave a little bit behind...
Then start making individualized assessments of projects/teams. Start with the larger ones, where you can hopefully make meaningful cuts with the least disruption. Make individual judgements as to whether the team is pulling its weight or needs to be shrunk (or eliminated entirely).
Where layoffs from a team are forced, offer transfers to other teams, which can evaluate whether they would be better served by replacing their lowest performers with these otherwise-doomed employees.
But... do it once and leave it be (maybe revisiting in a few years) Doing it every quarter (as implied by the QPR term) or even every year is an organizational forced-march.
Maybe you could get away with that at a hedge fund or other highly profitable venture (though in those places you can usually do this by giving/withholding bonuses, etc)
"Hence we may learn the lesson that on seizing a state, the usurper should make haste to inflict what injuries he must, at a stroke, that he may not have to renew them daily, but be enabled by their discontinuance to reassure men’s minds, and afterwards win them over by benefits. Whosoever, either through timidity or from following bad counsels, adopts a contrary course, must keep the sword always drawn, and can put no trust in his subjects, who suffering from continued and constantly renewed severities, will never yield him their confidence. Injuries, therefore, should be inflicted all at once, that their ill savour being less lasting may the less offend; whereas, benefits should be conferred little by little, that so they may be more fully relished."
Where I work they forced all the managers to give up an employee for the Y2K team. Of course they all recommended their least productive team member. Then the entire team was laid off in mid-2000.
If the goal is to lay off 10%, then tell every rating manager that he has to lay off 10% of his direct reports, modulo a limited amount of horse trading for true stars.
I worked with two folks that had previously worked at Intel. The same procedure was implemented there. There was a top 10%, a middle 80%, and a bottom 10%. This isn't a problem when working on a team of 10 to 20, but you certainly don't want to be on a team of 3 to 4. In that case, someone has to be the top and someone has to be the bottom. Once you are on the bottom once it's pretty much a 'start looking' situation.
These types of systems have their obvious drawbacks. You don't want to work with good people because the better they are the bigger chance that you'll end up on the lower end.
It's hard to turn around a company if you tell people to do something and nobody does it.
Large companies that use forced ranking: you will reap the fruits of your broken process after a few years.
They only exist to serve those above them. The entire purpose of their existence (and pay) is to do what they're told. They know it. Their bosses know it. It's inconceivable that any of them would do anything like you propose, because that goes against how they got where they are in the first place.
I only ask because when I was younger and hadn't been a manager, I would have thought the same exact thing (I remember dismissing managers as "shiny shoes").
Now that I do manage, I realize the multiple tensions and forces pulling and pushing on managers. Some of them include: making employees happy, hitting targets they've committed to, doing their own work, and interacting with peers to move the company forward.
If you have been a manager, I'd be interested to hear how you felt about "exist[ing] only to serve those above" you. Seems like a pretty tough existence.
Thanks for the insight.
Also, if this internal board is anonymous I'll eat my dirty underwear. I guarantee you the "L2 and L3 executives" (and probably the department heads) can attach names to posts, or have the means to order it done, if they really want to.
That is exactly what is done, and is why stack ranking is both abhorrent and dysfunctional (it incentivises in-team politics and sniping, each team member tries to ensure he's not the one in the bottom slot).
It also incentivises top employees to not work together and to not be put in the same team, as it decreases their chance of being in the "superior" rung and increases their chance of being in the bottom one, something more or less impossible if they're clearly the top of their own rank-and-file team.
- a very competitive attitude among employees (for better or worse).
- managers to remove "rotten apples" from the company, even if it means occasionally some good people have to leave.
Still, to me the benefits don't seem to outweigh the costs. The first point could result in back-stabbing politics; the 2nd point in removing extremely valuable employees which might demoralise teams.
Your idea is brilliant. I hope to recall it if I'm ever in this situation.
And as your example illustrates those that are very good tend to end up going elsewhere, because why bother putting up with bullshit when you have the talent to avoid it?