Stacked-Ranking Systems – Dumb and Dumber

If you view the CD cover for the movie, “Dumb and Dumber,”
you will see a brief introduction line that reads,
“For Harry and Lloyd, every day is a no-brainer.” The
employees of Microsoft and Yahoo may feel that this line
applies to their senior management teams.

After years of using a forced-choice performance
evaluation system, Microsoft has decided to discontinue
this disastrous program. This forced-choice or stacked-
ranking system requires managers to rank employees on a
curve – the bell-shaped curve.

The result is that people on the lower end of the curve
are considered poor performers and targeted for remedial
action and/or termination.

A stacked-ranking system assumes that in a department of 5
people, all 5 employees cannot be performing at a high
level. This bell-shaped approach to evaluations assumes
that 1 person is above average, 3 are average, and the
last person is a poor performer.

The reasons Microsoft has terminated its program are:

#1 Microsoft wanted to focus on teamwork and collaboration
and ranking on a curve forces everyone to fend for

#2 The system created resentment and distrust among
employees and with their supervisors.

#3 Rather than improving the company by encouraging
employees to focus on marketplace competitors, employees
saw their co-workers as competitors to be defeated.

#4 Top performers at Microsoft refused assignments on
high-powered projects for fear of being ranked near the
bottom of the curve as a result of being on a team with
all superstars.

Now, just as Microsoft is jettisoning its stacked-ranking
system, Yahoo has adopted such a system for its

HR POINTER: The goal of a performance evaluation system is
to improve the business by helping an employee improve
his/her performance. The way to achieve this is to create
performance standards within an employee’s job
description, which allow the employee to compete against
him/herself, not his/her coworkers.

Forced-ranking systems are simply the lazy manager’s way
out of managing employees because the manager lets the
system do the “dirty work” of determining who is targeted
for disciplinary action.

Traditional performance evaluation systems with arbitrary
5-point or 10-point scales are not much better. These
evaluation programs often rely on “managerial weasel words”
like dependability, reliability, adaptability, etc., which
mean whatever a manager wants them to mean.

If you are looking for a performance evaluation system
that truly evaluates performance and not personality, then
click on the link below to review our methodology:


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