Send to KindleI never thought I’d be using Microsoft for leadership lessons but here it is. Microsoft recently announced that they have jettisoned the stacked ranking system they used to evaluate employees.
To briefly explain stacked rankings, supervisors are required to place their people in one of three categories. The top rank gets bonuses. The bottom rank gets fired. Pretty simple. Also pretty dumb.
This sort of system can cause employees to have much greater concern for themselves than for the company or its mission and over time can be disastrous. A little simple math will tell you that the company will end up with a shortage of employees as each year employees who were okay last year are let go. It won’t be long before previously top tier people are shown the door, wondering what happened. They’ll be replaced by others who will soon follow. Since those top tier people are not stupid, they will see the writing on the wall and are likely to bail out before they too get the ax. The company will be left with mediocrity, employees concerned mainly with hanging on, and a huge turn-over expense.
If employees are under performing or damaging the company, then by all means, let them go. But, a system that plans to fire a certain percentage of people every year is ludicrous.
