My company is using stack rankings to evaluate performance, and I'm worried about being targeted. Is there anything I can do?

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My company is using stack rankings to evaluate performance, and I'm worried about being targeted. Is there anything I can do?
Forced, or stack, ranking is a system in which managers score their employees' individual performances relative to that of their coworkers.erhui1979/Getty Images
  • In stack, or forced ranking, managers rate workers on a forced curve.
  • A certain portion are deemed top talent; and a certain percentage are designated as low performers.
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I recently found out through the office grapevine that my company rates employees on a "forced curve" — yet they don't tell us, so most people are unaware of this system. With annual reviews coming up next month, I'm concerned about being unfairly targeted by my boss.

Apparently, managers are required to give at least one negative review on their team. They're also discouraged from giving too many good reviews.

My organization is very top-down, so there's not much room for discussion after the reviews are done.

This is problematic. Managers are incentivized to nitpick or include factual inaccuracies and misleading statements in order to check the box on giving negative reviews and hold off positive ones. I've surmised that they need a "reason" to deny people raises, bonuses, and promotions and a way to mark people in case of lay-offs.

This creates shame and isolation; people rarely talk about negative reviews. Meanwhile, employees become depressed, anxious, and demoralized. Some end up quitting. The system continues unchecked.

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I'm looking for a job. But in the meantime, how can I fight or preempt this without antagonizing my manager?

Forced, or stack, ranking — a system in which managers score their employees' individual performances relative to that of their coworkers — needs to die but, alas, refuses to do so.

The method gained popularity in corporate America in the 1980s, thanks to General Electric's CEO at the time, Jack Welch, aka Neutron Jack, who was known for axing 10% of the company's underachievers each year. Stack ranking is still used today, including reportedly at many Big Tech companies, though it's largely been found to be a terrible management practice.

For starters, it creates a toxic, hostile work environment that pits employees against each other — not good for morale, trust, or creativity.

It's also inexact. The discrepancy between the employee ranked first and the worker ranked last can either be wildly divergent or barely perceptible, but the forced distribution masks those differences.

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And it's notoriously idiosyncratic.

"There's no way of knowing that my definition of a three is the same as your definition of a three," Josh Merrill, the CEO of Confirm, a company that specializes in helping companies improve their performance evaluations, told Insider. "There's also a chance that the worst performer on my team could be the best one on yours."

Employees hate it, and managers do, too. Bloomberg recently reported on a manager at Blizzard Entertainment, a video-game developer, who said he was fired after he refused to give a low rating to an employee who didn't deserve it so that he could fill a quota.

Why, then, do some companies persist in stack ranking? Because they need a mechanism to recognize and reward their top performers and to identify and punish their lower performers.

Unfortunately, this is the company you're at and the system in which you're operating, and there's not a lot you can do about it — other than look for a new job, of course.

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But there are a few actions you can take. First, make a concerted effort to improve how you communicate with your boss.

"This issue might not be a function of the review process but that your manager needs more training," Anthony Nyberg, a professor of management at the University of South Carolina's Darla Moore School of Business, told Insider.

It's highly likely that your manager didn't set the right expectations, give you feedback on how to get better, or communicate with you about your goals along the way, he said.

"A lot of organizations struggle because they promote people from being an individual contributor to being a manager without any leadership training," he added.

Next, Nyberg advised a little soul-searching. Your manager might be biased or apt to slip in factual inaccuracies as a way to justify a smaller raise — or mark you for a layoff — but it's worth reflecting on your behavior.

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Think about your role on the team, your demeanor, and how you receive criticism. Ask yourself whether you're doing a good job receiving whatever feedback you're given.

Finally, solicit others' opinions of your work. Ask other colleagues in the organization for their feedback on your performance and include their written input before you sign off on any formal evaluation. That way, your boss doesn't have the only say.

Good luck.

This article originally published on January 27, 2023.

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