> " Mayer also favored a system of quarterly performance reviews, or Q.P.R.s, that required every Yahoo employee, on every team, be ranked from 1 to 5. The system was meant to encourage hard work and weed out underperformers, but it soon produced the exact opposite. Because only so many 4s and 5s could be allotted, talented people no longer wanted to work together; "
Can somebody talk about his experience in the same conditions?
Rank-and-yank arguably worked well at GE because Welch was dealing with a large, unwieldy, and poor-performing conglomerate that had a lot of room for workforce reduction. But as the company got leaner and more effective, it got rid of the practice, and it's unclear why tech companies -- which one assumes haven't had time to get lazy and complacent -- jumped on the bandwagon.
In fact, theoretically, if you're constantly cutting the bottom 10-20% of performers, and the quality distribution of new hires remains constant, at some point you should have pulled up the overall quality of the organization. The fact that you can't create a perfect organization by constantly cutting the lowest quantiles suggests that either something's wrong with the ranking systems used (which there is!), or that the practice has deleterious effects on retention, behavior, and morale (which it does!).
Practically, this means that, as a manager, you get really good at piling up deadwood until the order comes down to swing the axe -- far easier to keep a few window-seat employees around to satisfy the Layoff Gods than to go to war every time you do your QPRs. You might also coordinate with lateral colleagues to move good employees around so you can keep them in the game.
In practice you see it applied in very large teams with team wide metrics. Like 1000 people in a call center. The guy who hacks the system or gets assigned to a special team that naturally results in better results, can consistently win every time.