Assessing performance on a curve, where managers are forced to rank a certain number of employees as high performers and a certain number as low performers, is creeping back into several organisations, most notably Yahoo. Laura Johnson askes if assessing employees on a curve is really the most effective way to improve performance
Yahoo’s CEO, Marissa Mayer, is once again embroiled in an HR scandal. This time it’s the company’s ruthless Quantitative Performance Ranking (QPR) system that’s put her in the spotlight. Condemned for being unfair, widely detested, unrepresentative, skewed by favouritism and many less polite allegations, Mayer’s decision to bring back the bell curve is clearly not winning her any fans inside or outside of Yahoo.
The evaluation system in question was rolled out just over a year ago and allegedly forces managers to rank employees in a modified bell curve. Appear in the wrong tail end of the chart and you’re at serious risk of being in the firing line. And with 600 dismissals reportedly made in recent weeks, this brutal performance management tool is not an empty threat.
Managers are miserable because they’re under pressure to name a certain number of workers as poor performers (even if they don't believe they really are). Employees are burdened with the fear that they could be the next victims of the system. The approach appears to be universally unpopular and now everyone knows it. Complaints about the company’s appraisal process made on an internal staff message board were recently leaked and have caused a media stir. But is using a bell curve to rank employees really anything new? Was Mayer’s real error choosing to be open with employees about its existence? Are there sound reasons for the system? Or does it just crush team spirit and deter collaboration between colleagues? Two HR experts share their thoughts on Yahoo’s forced ranking method of performance management.
“I don’t think forced ranking is a big deal,” says Paul Matthews, author and speaker on informal learning, management and leadership.
“Show me a manager who doesn't use (at least in their head) an implicit forced ranking system for their team. All managers do. They ask themselves who’s at the bottom of my team and who’s at the top? How can I ease out the ones that are dragging us down and get more people in who are doing really well?
I suspect it’s been put in place at Yahoo to do a bit of pruning. They've probably got some dead wood to get rid of and this is one way they’ve decided to do it. If you offer everyone a package, the people who are really good leave. If you put a bell curve in place the people who are really good know they’re safe and they’ll stay. But you’ve got an excuse to get rid of the poorer performers.
I don’t think forced ranking is a big deal. The concept is sound and it makes a lot of sense but it’s usage that lets the system down. Where it gets messy is with how data is gathered. Who is scoring whom? On what basis are these scores made? How is it decided whether someone is at the top, bottom or middle of a bell curve? It needs to be based on a mixture of different factors and some of these can be very difficult to measure."
“A hyper-competitive workplace will stifle collaboration,” says Tara Danes, HR and employment law consultant
"The bell curve is a natural distribution and only works with very large numbers. If you get managers of smaller departments trying to put people into that kind of curve it won't work – it’s going to be forced, it’s going to be fake and it's not fair. Things get artificially inflated or deflated just to make things fit.
By effectively comparing people against each other, you’re also making it competitive and that creates conflict. It causes people to work against each other rather than together, which is not conducive to people doing a good job. As a result, employees will feel they’re not being treated fairly and this is when they’re going to be unhappy. You might end up with people leaving that you don't really want to leave just because they’re not happy with the situation. It could also lead to absence, disputes and grievances. There are so many ways it could go horribly wrong.
I don’t think any organisation should have a culture of fear because sooner or later it’s going to backfire. It only takes one person to sabotage something that somebody else has done and it creates a horrible atmosphere for people to work in. I don’t see how this can be conducive to good performance at an individual, team of organisational level."