Does rank and yank really work? One of the fundamental needs of rank-and-yank management is identifying weak performers. When top management presses managers to identify more, what group do you think they take from? University of Chicago researcher and social network analysis expert, Ronald S. Burt, discovered who in his network analysis at one firm:
In the annual cycle preceding the network survey, 17% of the managers were judged “poor”, 55% were judged “good”, and 28% were judged “outstanding”. Under pressure from top management to identify more weak performers, the proportion of managers assigned to the “poor” category increased to 25% in the second year, with 53% judged “good” and the remaining 22% judged “outstanding. [“Structural Holes and Good Ideas”, by Ronald S. Burt (U of Chicago), 2003:pp. 23 (preprint of article to appear in American Journal of Sociology)]
When you force people to have more under-performers, you actually just steal them from the top.
Worse, you don’t make more people better performers — more people became mediocre. You didn’t take from the bottom, but from the top performers. When you do this, you create problems among groups that don’t have poor performers (why would I have hired a poor performer?) and you never take a look at your management practices and structures that are actually creating your performance problem.
The rest of the article is interesting, too. But he keeps finding what are really system that have the components:
- Bad Performance
- Bad performance rating
- Social Isolation from peers, those above you
- Lower pay
You can see how these would feed on each other. It’s interesting. I’m not sure what comes first: bad performance or bad rating. Certainly, being rated poorly can lead to social isolation which in turn leads to poorer perceived performance.