Stack Ranking: Brilliant Management or Inherent Absurdity Abstract Employee stack ranking is a performance measurement system that requires every manager to rank its employees from excellent to poor. Stack ranking was popularized by Jack Welch at General Electric in the 1980’s. Since that time it has become a popular management technique. The use of stack ranking has many demonstrated successes, but many managers and business analysts are beginning to questions its value to an organization. In this paper I will examine from a critical perspective both the good and bad aspects of stack ranking in an attempt to determine its long term viability as an organization behavior. Stack Ranking: Brilliant Management or Inherent …show more content…
This tendency results in inflated ratings, as well as wholly inaccurate ones, since areas for performance improvement tend to be ignored or swept under the rug in performance appraisals. Central tendency bias refers to a tendency for raters, or managers to evaluate most of their employees as "average" when they apply a rating scale. So, for example, given a scale with points that run from one (poor) to seven (excellent), with four being the average, many managers will refuse to use the points at either of the ends. There will be a tendency for almost all ratings to fall within the 3-5 range. This can be problematic since a poor performer may be rated slightly above average while outstanding employee may be rated in that same 3-5 range even though he or she deserves a higher rating. By eliminating the use of the aforementioned biases, stack ranking helps a management staff identify both its high performers and its poor performers. Once high performers are identified the company can provide pay, bonuses and promotion opportunities commensurate with the employee’s contribution and potential. Thereby eliminating the brain drain effect and allowing a company to retain its strongest assets. On the opposite end of the spectrum poor performers can be identified and appropriate action can be taken
Developing a recruitment and selection process with high standards is what will result in attaining personnel capable of amplifying excellence, which is the first step of the second principle, known as raising the bar. “Regardless of whether the company is large or small, hiring the best and brightest employees lays a strong foundation for excellence”
Performance appraisal is a method which is increasingly used to evaluate employees to determine the degree to which they are performing effectively and encourage them to direct their energies towards organizational performance. Although the appraisal is being practiced, there are criticisms made against the system which generally arise from within the Orthodox and radical management frame work.
This is easy to ranking objects with esteem to few employee if only has a few persons, however the rater probably turn into exhausted and cannot distinguish between all employees if the persons increase.
The forced ranking is a very harsh rating system in my eyes. I believe the forced ranking system is unethical. Eliminating the bottom ten of an organization ever year can be costly to a company. It promotes employee turnover and increases the company’s labor cost. Recruiting, hiring and training new people to replace the terminated employees can be very expensive. There is no guarantee that the newly-hired employees will be any better than the old employees that were eliminated. This system is not fair to employees and emp0loyees don’t have faith in this system. There is better ways to manage performance and there are effective ways to improve performance level of employees. Management can control performance by exploring the causes of performance problem, what cause the problem, develop an effective plan and empower their employees to reach a solution, communicate with the worker and provide positive feedback. Once an employee has been identified as a non productive employees, management should find out why the employee is not productive and offer them coaching or training to help the individual.
The performance appraisals process is flawed in many ways. Lack of preparation, time, training, and professionalism are a few examples of how the system is flawed. The individual completing the application often has many tasks that supersedes taking the appropriate time necessary to accurately keep notations of an employee's performance throughout the year. The lack of time leads to an employee receiving a performance review on the most recent accounts of his or her job performance instead of his or her performance throughout the entire year. Lack of professionalism can also hurt the appraisal process. An employee should be rated by his or her job duties instead of the personal opinion or feelings the manager or supervisor completing the form. All
(2010) state, “Under this system [rank-in-person], employees qualify for promotion from one rank to another based on competencies and education (assuming promotions are available). And the rank is carried with the employee who moves from one job to another” (p. 133). This is a stark contrast from traditional job classification and evaluation systems where focus is on the functions of the particular job. As with everything in life, there are advantages and disadvantages. The main advantages of this system are flexibility and increased workforce utilization.
Rating against a standard permits a supervisor to classify employee performance independently from that of other employees. Both supervisor and employee have a reference point for accurately looking at an employee’s long-term performance growth.
Objective measures, such as turnover, sales, absences or production rates are often considered as better measures of job performance. Sadly these criterions also have their weaknesses, at least to some extent. A recurrent problem with these measures is that of criterion contamination. Simply put, even if the criterion in question is of central importance to the employer such as sales, there can be several different reasons for the individuals specific value in the criterion, for example leadership and environmental issues which effects the compared employees differently. There are possible efforts to be made trying to limit these factors influence’s on the results, with varying efficiency (Hammer & Landau, 1981;
The topic I chose to research and discuss is the topic of recruiting and retaining the best employees. I chose this subject because I felt it was important for an employer trying to compete in this very competitive business environment, no matter what the business is, to be able not only hire the best and most qualified employees but retain them and keep them motivated. The ability to distinguish the difference between high performing employees and lower performing employees can be detrimental to a company’s success or failure. In retrospect, this goes back to recruiting and retaining the best employees while avoiding and being able to let go of those of a weaker caliber. Before an organization can thrive in recruitment and retention,
Some managers rotated the highest ranking between their employees from one year to the next. So the objective of developing new evaluation system was unfulfilled.
“Performance appraisals can enhance employee performance as well as advance the mission and goals of an organization. There are many advantages of performance appraisals if they are applied fairly, consistently and objectively. Performance appraisals not applied fairly can be counterproductive and even destructive to
Fortune 500 companies have long implemented a rank and file system to which employees are assigned a number as to where they stack up within the company. This issue is that if employees rank 30-60 all have the same work output and favorable reviews, organizations are not able to accurately assess where they stand. For this reason, Accenture has done away with the system. Here’s what CEO Pierre Nanterme said about the transition.
their superior contributions, whether it be pay in the form of performance-related rewards or simply higher-than-average compensation (4). It is also critical to ensure that the recruited ‘human talent’ sustain and further develop their skills through forms of (5) extensive training and experience. (6) The reduction of status differences is a means to ensure the
From the interview with Ms. Lim, the managerial will rank their employees according to their relative level of performance. The employees will be call upon into the office by their own manager or even supervisor, and will be interviewed accordingly. Ranking is done on an annual basis during the annual planning cycle, which takes place worldwide during Quarter 1. There are three rank categories and a performance category for employees who are not ranked because they are not consistently demonstrating the performance expected of those in similar positions. The rank categories are:
While it’s essential for each association to recognize high and low performers, Microsoft doesn 't need to utilize forced ranking or constrained degrees to successfully separate appraisals and drive elite. Numerous organizations wrongly think stack positioning is the best way to oversee and prize brilliance. Here are some substitute steps we can bring to manage evaluation creep or random appraisals and low execution.