“Rank and yank” is tough language for a tough system. It’s the employee evaluation method that periodically rates some workers lower than their peers and fires them.
Some say the regular housecleaning dumps deadwood, makes room for innovative, new employees, and motivates workers to do better.
Others say rating systems, whether they involve numbers or phrases such as “meets expectations,” are morale killers, don’t motivate, and take way too much time and money to administer.
A recent account in The New York Times revealed a harsh Amazon headquarters, where managers may manipulate appraisals more for their own ends than for worker improvement. Amazon founder Jeff Bezos responded that he didn’t recognize the company portrayed in the article and asked employees to essentially tattle on managers or co-workers who abused the system.
Meanwhile, in many companies, rank and yank is dead or dying. Microsoft, Adobe, Deloitte, The Gap, Accenture, Google and Yahoo are among major employers that are changing, if not eliminating, formal employee appraisal systems. Even GE, the archetypal rank and yank proponent under Jack Welch, is changing.
Many employers are concluding that employee ratings often tell more about the rater than the rated. Want to make your department look like it’s full of top producers? Want to get rid of a thorn in your side? Want to keep a star performer from job hopping? Putting people in certain ratings categories can do the trick.
A raft of social scientists have found that performance rating systems generate malaise for the majority of workers. “Satisfactory” is a career killer if a co-worker is “outstanding.” While the top-rated employees get raises and bonuses and the lowest-rated employees get axed, the big group in the middle plods on, unmotivated by being told they’re doing OK.
Some workplaces believe they get better results with “360 degree” appraisals. Peers rate each other and workers rate their managers. That system, of course, strikes fear among managers who have controlled one-way evaluations. But it also reflects the current ease with which workers can post comments on Glassdoor.com or other sites. Millennials, especially, demand input.
Abandoning forced-rating systems puts terrific pressure on managers to give timely and effective feedback. Ideally, it’s like potty training toddlers – you catch them being good (or bad) and react immediately with pertinent response. That takes time and talent, which many managers don’t have. And, given downsized workplaces and the press of daily business, it isn’t necessarily their fault.
The challenge: Any fix for broken evaluation systems requires a clear, fair way to allocate compensation. For countless employers, rankings are the tool to decide pay, not to improve performance.