Like there isn’t enough politics in the workplace . . .  command and control managers love to rank employees.  There needs to be forced ranking by assessment of performance to be a good manager and have a well-run company.

Some rank to give bonuses or incentives and others rank to RIF employees (have to get rid of the bad ones).  I never have found good reason to rank and always advise against it.  It is a bad practice that leads to waste and sub-optimization.

I won’t dispute that there is always someone at the top and the bottom in performance of any entity.  But the waste of performance appraisals, competition, back-stabbing and manipulation far outweighs any conceivable benefit.  Money and morale is lost with these activities.

The distribution of people and there performance is typically bell-shaped:

The diagram above indicates that the winners get the bonuses and the losers get cut.  But what if we take a different approach and instead of focusing on forced distribution, we  focus on improving the design and management of the work.

Instead of a select few we make the work better for everyone and all benefit including the company.  A small shift in a system improvement of performance always outweighs moving a few of the “high performers.”

In working with a client recently that “ranked and rated” employees, I was told that this ranking is what made the company so great.  The first thing is that when we looked at actual performance it was atrocious and customers we spoke with told us so.  They didn’t know how bad their performance was until we started studying customer demand.

But this organization swore by the ranking and rating that “made their company great.”  In fact, they were successful in spite of the ranking and rating, not because of it.

You see there are three scenarios that typically separate employee’s performance:

  1. They really have a better method or are a better match for the job.  In this case, why would you want to have forced rating where competition for incentives and bonuses keeps employees from sharing with each other.  The end result is individual wins and company loses.  If the person is a better fit than others organizations need to learn this and  feed it back to the hiring process.  Personality (Myers-Briggs Assessment) might be helpful in assessing difference
  2. There is manipulation at play.  Employees learn to game the system by cutting corners and cheating.  When rewards or your job is at stake all is fair.
  3. There is no difference in performance.  Over the past 20 years I have found this is usually the case.  Very few times do I find better method.  And when the incentive to manipulate is taken away, I usually find very little difference in performance.

So how do we know if we have a difference?  We chart there performance if data is collected.  If no data, then your ranking is subjective and political and a huge waste of resources.  There is no objective performance appraisal system despite all the consultants that sell software to do so.

In my most read post Service Metrics: What You Need to Understand I outline how to analyze data.  You can do the same thing with employees performance when data is present.  It may look something like this:

Any data within the limits (44 and 155), and performance is attributable to the system.  This means that working on the system is your biggest opportunity for improvement.  The system is comprised of the work design, structure, technology, management thinking, etc.

Our greatest opportunity to improve is to design better work and learn better ways to manage.  The old thinking of command and control, ranking and rating is flawed thinking and too many organizations have succumbed to this thinking.  If you are looking for a competitive advantage, this may be the one opportunity not to miss.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.