As a manager, I am a proponent of stack ranking used as a tool to differentiate the value of each employee on my team. Stack ranking is simply a list of everyone on my team in order from most valuable to least. The list can then be used to among other things, provide feedback during performance reviews and determine equitable salary treatment. I evaluate the performance of the individuals on my team and then translate that into the stack rankings of the entire team.
Some managers think of stack ranking as a lifeboat drill. If you and your team were stranded in a lifeboat too small to sustain the entire team,and the intention was to survive (survival defined as to continue to meet the objectives established for your team) who would you kick off the lifeboat. With a stack rank list, you would kick off the folks at the bottom first.
Now for a hypothetical. Imagine that senior executives for the company decided that each manager would create a stack ranking list for their team. The top 10% would receive merit increases and any available retention offers. The bottom 10% would be notified they will be laid off in 60 days. Managers will repost the laid off position for new hiring. Laid off employees are advised they can apply for other open jobs created by the bottom 10% in other manager groups. Senior executives see this action as a way to strengthen their team by taking care of the top 10% and upgrading talent in the bottom 10%.
There are strong arguments for this proposal. I do believe that Sean Payton, coach of last year's sSuper Bowl winning New Orleans Saints, identified his weakest players shortly after the end of last season. He has probably worked to replace those players during the off season to become a stronger team in 2010. The senior executives of a company are probably doing the same thing with their team.
A potential downside to this plan is to the 80% of employees that are not in the top or bottom 10%. They probably are not aware of the special treatment of the top 10% (the carrot). All they see is the 10% lay offs (the stick). Will they feel like targets that mg ht lose their job at any time? Would their morale decline as a result? Or would they be motivated to improve their performance? Would the company benefit by becoming stronger or weaker from this plan? What are your thoughts?
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8 years ago
To me it depends upon the overall rewards at the workplace as compared to other companies in similar industry. If the company pays very high in regards to similar companies, such that even the middle 80% see competitive pay advantages, then the result can be a strong pursuit for achievement. Like in many Sales forces, where the risk and stress are seen as having compensating rewards, this can be a big carrot, although sometimes yielding a cut throat competitive environment not conducive to a team orientation.
ReplyDeleteHowever, my experience is that compensation remains at best on par with other companies, and this results in the 80% looking for other opportunities where the stress and question of management's true assessment is not a part of the environment. Due to the lack of visibility of the additional benefits to the top 10%, plus the very small number that receive such incentives, the 80% perceives the gain not being favorable to the risks.
In other words, what appears to be a good way to motivate staff, in fact works against the organization in a real world implementation.