Let’s talk for a moment about the ‘rank and yank’ approach:
It started with GE and quickly spread to other major corporations. Microsoft, Amazon and quite a few others.
The idea was simple and seductive:
Rank all employees by whatever metrics make sense. Then, every year, give generous bonuses to the top 20% or so, and fire the bottom 10% or so.
I don’t know what the logic behind this was, but I like to think Darwinian evolution came to mind. By firing the underperformers, you enforce a sort of natural selection on the workforce.
Over time, by culling the underperformers, the workforce will evolve to become even better. Only the best will survive in the long run.
Eh, not so much.
See, people often forget how evolution really works. Many folks, even quite a few biologists, see evolution as a force for making organisms superior.
These sorts of people see humanity and intelligence as inevitable. Smart is ‘better’ than dumb. Humans are ‘better’ than our monkey ancestors, so they evolved into us.
Likewise, a high performing workplace is ‘better’ than one that slowly ambles along. Therefore, natural selection will only create an organisation that’s more productive and innovative.
But natural selection doesn’t make organisms better.
It makes them fitter.
They become ‘better’, only in the sense of being better at surviving.
And that’s what happened at these companies. The workforce evolved, but not how the CEOs hoped:
Employees became destructive. No one wanted to help anyone else kick goals, even if it cost them nothing. In fact, they were better off trying to sabotage each other. In a ranked system, elevating someone else meant undermining yourself.
People raced for the shiny new projects, neglecting the basic and boring jobs that keep the lights on.
Team leaders would turn away superstars (seeing them as potential threats) and pad their teams with a buffer of underperforming deadwood.
If a human wanted to build a better organism, they’d make something faster, stronger and smarter. But Darwin designs differently. Sometimes the smaller, weaker but craftier creatures survive more often… and that’s all natural selection cares about.
File this one under ‘Unintended Consequences’.
On paper, it seems like an okay idea, until you ask this question:
What will this do to organisational trust?
Will it improve it, or utterly destroy it?
That’s a handy question to always ask. It would have saved these companies an imperial ton of pain.