How to get rid of forced ranking; story from the trenches

All companies have boundaries; things that you just have to live with. Values are essential in this context; you use them to know when to fight, what to accept and when to move on.

This is a true story of getting rid of Forced Ranking: A group of colleagues challenged our 70.000-employee-company-boundaries based on our values, the values of the team, and the values of the company:




Forced ranking
this is also known as vitality curve, forced ranking, forced distribution, rank and yank, and stack ranking.

The concept was made by Jack Welsh in the 80's, and the point is to divide and label employees into three groups: the 20 % top performers (that should be rewarded with bonuses and stocks), the 70% majority, the bottom 10% (that should leave the company).

I do not see anything positive about labelling all employees with grades like this. In a high performing team it does not make sense to label 70% as average!!! Who wants a team where 70% are dis-satisfied?

This labelling system break trust between leaders and employees, between peers, and create economic incentives to be in a weaker team. It prevents collaboration, learning and teamwork.

The system is also linked to goals and this create a system of goals that everyone make sure they meet ( = weak goals and not revealing the company's true potential). If the achievement of goals is linked to compensation, the intrinsic motivation is replaced with money motivation, the extraordinary work is replaced with average performance that is aligned 100% to the plan rather than aligning to adapting to constant change and stretching for the extraordinary.

Ok, so what to do with this?

1) research
I knew in my heart that forced ranking was wrong, but had to put my thoughts into more precise wording. I started to write down my thoughts and searched to find what others have said and done in the matter. I found some great material:

• Edward Demming's book Out of the Crisis
• Daniel Pink's book called Drive, here is a ted talk and a RSA animate of it

2) reality check
I also talked to my peers (other team leaders and project managers). This was disappointing, because half of the people I talked to did not see the problem at all. One person with 50 employees and several managers reporting to him said to me: "if this was a problem I would have known".

But (of course) I did not give up, and I focused on the ones that did see the problem and could help in finding a solution.

3) proposed solution 
I worked close with two peers, and together we made a three-slides-deck describing the problem, effects and possible solutions.

4) escalation
We presented this to our site manager, and he accepted it and scheduled a meeting with our General Manager and Senior Vice President.

5) case closed?
Our GM and Senior VP joined forces with their HR representative, and we were able to get rid of the whole rating system!

Hurray!!!

So, when you meet a boundary that you just think is important enough to fight; I encourage you to do something about it. It is in your company's best interest. Use your values as a guideline :)



Have a nice weekend!
Eira