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The Return of Rank and Yank

By Org Coach Thomas

Oct 31, 2016
 

A simple solution to improve workforce morale during this period of annual performance feedback.

 
 

It’s that time of year again when annual performance feedback is given to refinery employees. While a very small segment of employees enjoy this time of year, the majority of the workforce dreads it.

 

Since many oil companies employ some variation of Forced Ranking systems, I previously shared a list of issues. As noted, majority of the undesirable outcomes result in a de-motivated workforce.


In this follow-up article I will not restate the pros and cons of forced ranking. This argument has been around long enough, and large



corporations need some system of evaluating and motivating employees. Forced ranking is here to stay, thus we need to embrace and get past it.

 

The challenge that very people speak to, is not whether we should have force ranking or not, but how to manage it effectively. As with most things in this world, I emphasize the value of proper communication in this regard.

 

Since most oil companies are run by engineers, the issue is that most companies designed performance ranking purely around a relative system. Accordingly, performance communication comes with relative comparisons, and this is where things often fall apart.

 

I will not focus on the top and bottom performers in this article. Forced ranking communication should be less of an issue for these groups as the message is clear - it should also not come as a surprise.

 

The performers in the middle of the pack are where most of the issues are taken.  This is because of several reasons:

 

  • Some middle performers believe they should be ranked in the top
  • Ranking criteria is often not clearly communicated to employees
  • Performance feedback throughout the year is often not routinely communicated
  • Final performance feedback is not managed thoughtfully

 

As expressed earlier, the most notable issue is that relative number ranking creates a disappointing situation for middle of the pack performers.

 

Imagine an employee that puts in 60 hours a week every week, only to be told at the end of the year that they ranked in the 60th percentile. Or how about someone who achieved $1 million/year energy savings but was ranked “average”.

 

Whether your company uses “middle third”, “average”, “grade B”, “mid pack”, “cluster 2”, or “mid performer”, your issue is communicating performance as a relative term.

 

I do not dream of a utopian organization where employees are not compared to one another to grade relative performance. You cannot avoid making comparisons as it is critical. However, you need not deem it a specific classification for final performance feedback.

 

As an alternative, consider how the messaging sounds when you communicate that an employee has “met expectations” or has “delivered expected results”. An employee that meets expectation may not receive a raise greater than inflation, but you do not need to falsely worsen the feedback by adding the qualifier of “average performer”.

 

The irony is that managers are the ones who likely despise forced ranking system the most.  Managers are consumed in week-long meetings at the end of the year, fighting amongst one other, trying to rank their employees the highest. Furthermore, now they must be the bearer of bad news to “average” employees who have worked hard and met expectations.

 

Why must we create category definitions that make a performance feedback system worse than it needs to be?

 

As noted above, I am not suggesting that companies abandon force ranking activities. They can force rank in the background, however, just communicate results differently. I suggest the following simple categorizations:

 

  • Exceed expectations
  • Meet expectations
  • Below expectations

 

Nothing earth shattering in the descriptors above, as I know much of this language is used by companies today. My only suggestion is to purely stick with these category labels, and do not formally create categories with relative comparisons.

 

I’d like for you to reflect a moment on the simplicity and merit of my suggestion. Can you find any fault with this? It’s time for engineers to be less of an engineer, and think more like humans.

 
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  • Nigel Bradshaw :   your solution is pragmatic and someone that has to give this feedback. It keeps it simple and everyone looking at what matters.Also the other disheartening flaw I always find at this time of year is that this work is often done by engineers, trying to group people into statistical category's when all the time the time the sample size is too small to be statistically significant. The process is flawed from the start. For such small sample sizes it is possible to have a high percentage of people exceeding expectations or none.

    Mar 06, 2015

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