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Forced Ranking Systems – No Longer Effective

There have recently been several great articles (Sunday, July 22 – www.ajc.com) and Vanity Fair about how the forced or stacked ranking systems that were made famous in the nineties with GE are now being considered “stifling, demoralizing and counterproductive”.

A current example cited in the August issue of Vanity Fair spotlights how many of the problems facing Microsoft these days relate to the “toxic culture” that their forced ranking system is breeding amongst their employees. The system is creating a culture where individual gain is more important than teamwork and collaboration.

The results of this ranking system – as quoted in a 2006 Harvard Business Review article – is “lower productivity, inequity, skepticism, decreased employee engagement, reduced collaboration, damage to morale and mistrust in leadership”. Not exactly what anyone would want to bring or maintain in their organization.

Fortunately the forced ranking system is being replaced by a system where employees are evaluated but not compared. This allows for a more balanced and equitable review where performance is critical not identifying winners and losers. The goal is to get everyone to understand what the common objectives are and determine their current abilities to deliver on them. In turn teamwork and collaboration are encouraged and nurtured.

I want to thank Michael Kanell (mkanell@ajc.com) for the inspiration for this blog.