Ask Slashdot: How Does Your Company Evaluate Your Performance? 525
jmcbain writes "I'm a former Microsoftie, and one thing I really despised about the company is the 'stack ranking' employee evaluation system that was succinctly captured in a recent Vanity Fair article on the company. Stack ranking is basically applying a forced curve distribution on all employees at the same level, so management must place some percentage of employees into categories of overperforming, performing on average, and underperforming. Even if it's an all-star team doing great work, some folks will be marked as underperforming. Frankly, this really sucked. I know this practice gained popularity with GE in the 1980s and is being used by some (many?) Fortune 500 companies. Does your company do this? What's the best way to survive this type of system?"
Benner Model (Score:5, Interesting)
Re:Change job, you cant win. (Score:5, Interesting)
I've just finished a job with what used to be a great company and more importantly with a great team with common sense (immediate) management (so no bullshit metrics). The whole atmosphere in the team was to share all knowledge, 100% cooperation, no competition. Holes in knowledge were filled very quickly, everyone loved work, and everyone ended up an over-performer. (So kudos to the recruiters for getting the right kinds of people who thrive in that kind of environment in on the project.)
I suspect I'll not find a company like that again, which is a real shame. (Having said that, the seeds of a start-up are forming...)
Re:Yes, and it sucked! (Score:4, Interesting)
I remember a job 10 years ago when the "metrics" were rolled out one year. I had basically taken over the work from ~8 student workers, and had spent almost all of my time rewriting clumsy buggy code with tight maintainable code. In so doing, I was working at about -5 kloc/year. Therefore I was the "least productive" person remaining on the team. My manager laughed as he delivered the news. We laughed. However, my request for them to "stop even taking meaningless metrics" was met with "sorry, ain't ever gonna happen".
Avoid being black-mailed (Score:4, Interesting)
This might be a difference in work-place culture, but whenever I choose a job I always only considered the fixed salary part for comparison. If I was happy with that, the job is ok. If I need some bonuses to make a decent living, it was re-negotiation time. The nice consequence of this is, that I don't care much about the rigmaroles with performance reviews to decide on the bonus. That makes me very relaxed and whatever comes in is just a nice bonus and nothing I really need. In the end by not caring, I swim along with the average, but I still can tell them to get stuffed if the idiocy becomes too rampart. And being the one to stand up and voice what everyone is thinking sometimes makes you popular or someone to be consulted beforehand.
In the companies I worked for, the more formal and stupid the system was, the easier it was to gamble. I liked best the system with self-defined yearly goals, where the road to success was in the skill to formulate impressive sounding goals where the non-performance was hard to verify. Or to be part in projects that get shut down because of reorganisation before being delivered. That never got me top rates, but before going through the hassle of digging through the bones for some real data average success and bonus (or slightly above average, if I bickered too much about my valuable contributions) was assumed independent of the actual performance.
For me that gives the best results for a minimum of exposure to the whole idiocy.
My experience (Score:2, Interesting)
I've been on a company that follows this aproach
They had a fixed percentage to put into above the average, result: ... ...
- some years a few good people had an average evaluation -> good people get frustrated -> good people leave
- some years a few average people had a good evavluation -> good people that last year got an average evaluation get frustrated
They also had a fixed percentage to put into bad evaluation, result: ... ...
- some years a few average people had a bad evaluation -> average people get frustrated -> average people leave
- some years a few bad people had an average evavluation -> average people that last year had a bad evaluation get frustrated
From year to year there seems to be a group of good people, lets say 30%, that try to get into the 20% openings for "good evaluation" the result is 10% will always get frustrated and consider the system unfair because they consider themselfs above average.
Everyear, a lot of people (perhaps 40%) are not incentivated to fight for good performance because they are not good enough or not willing to sacrifice personal time/life to achieve that mark, nevertheless they are good enough to have an average evaluation, they just go with the flow ... ...
For these people the system has no impact whatsoever
All in all, the system seems to have some advantages but I'm not sure the advantes are greater than the disavantages.
How to survive? ...
What are you aiming for?
To be on the average evaluation, you usually don't have to do much, after all you must be better than the bottom 10% or 15%
To be on the above average evaluation if you are on a star project on the company and if you are good you have a good change to get a good evaluation, if you are on a marginal project, don't even try it you will have to work 2x has hard as someone on a star project to get a good evaluation.
And offcourse there are politics, some people will get a better evalution not based on performance but on social connections ...
Between the people that don't care if they get fired, the people that won't fight to get to the next evaluation level and the people that would fight to have a good performance even withough the system in place, this system is only having impact on 25% of the people.
Here's how we do it... (Score:5, Interesting)
I think we're still a Fortune 10 company... we manufacture consumer products globally, and have a global performance evaluation (PE) process. I will be as generic as possible in the terminology. Oh, I'm a manager who conducts PE's, and also a volunteer on the personnel development forum (PDF) for non-management personnel.
For PE's, we have a top-tier level that's limited to 15% of the eligible pool. In my department so far this year, we've not nominated enough people to meet that 15% (we're in a new region, and all of the local employees are new). Then there's 70% to 85% of people that are achievers. This bracket is slightly open because there's an allowance of 15% of under-achievers and non-performers. The key is, we're *not* forced to bracket anyone into the lower tiers. And like I said for the top tier, we're not forced to bracket people into that tier, either.
Our system makes sense. Not everyone can be a super-star; even when everyone is a super-star, there's always a small percentage that have a little bit of an edge. And because we're not forced to rank anyone as under-achievers, we recognize that even the weakest link might be carrying his or her weight -- and carrying weight (do your job) is all we ask!
To prevent abuse, all of the top 15% and the lower 15% (if any) all go to the PDF committee that I mentioned I'm in. There, my fellow managers and I review the proposals for the highest-achiever rankings, and we all have to agree. Basically, you can't screw your way to the top, or other methods of brown-nosing.
And as a low-level manager (organizationally-speaking), I'm subject to the same process at my pay grade. And I'm fairly happy with it.
360 degree reviews (Score:4, Interesting)
Re:Easy answer for non-americans (Score:5, Interesting)
My reply had been to the GP, about union problems.
Anyway, if they insist on stack ranking, then hire (or transfer) someone in to be the bottom of the pile. Game theory is the only way to play silly games.
A previous boss of mine (in IT, an American employer) did something like this. Played internal politics and "transferred" someone from another group in the company (we shared our building with multiple groups from the same multinational). It was understood that the company would play silly games like this, and the person in question kept working for group B, but technically belonged to our cost centre, and was there as ballast to be made redundant when the 10% chop came around. He knew it, and was already working on his plan B (planning his own company, I believe, which would be ready the moment he got his redundancy money).
Re:obvious answer (Score:5, Interesting)
This doesn't work though.
I can give you a real world example. My partner was a retail manager for a well known denim retailer, and was consistently the top in the country each year in terms of year on year growth no matter which store she was assigned to. The problem is only one manager was allowed to be graded 1 on a scale of 1 to 5 or whatever it was. She obviously deserved it as she was the one consistently performing the best, but this had issues.
If it was given to her year on year, the other managers felt they had no chance and just had no motivation to excel themselves because they were only going to get a 2 anyway - they could try really hard and almost do as well as her, but not quite, so why try when they'd get a 2 regardless? The worst part being these grades were linked to your annual rise, so no matter how hard you tried you'd only get a smaller rise against her.
So the management figured well hey, we need to motivate the other folks, so we'll give it to them for how hard they tried, rather than actual results, and so then it's my girlfriend who despite her stellar performance instead suffers and gets a lower payrise. Then she has no motivation to really continue to outshine, because she's not gaining anything for it, in fact, someone that performed worse than her is getting a better reward than she did.
Of course, the solution may then be to increase the number of people who get a 1, but then at that 1/2 boundary you have the EXACT same problem. Those who try real hard can never quite catch the top performers so are not motivated to do so. Really, the only solution is to instead rank people based on a sensible balance of effort and performance without any cap on how many can be deemed to be top performers. If you extend it to say 5 out of 30 people can have the top grade, then what happens when your survival of the fittest type management system gets the 6 best managers in the country in? well, the 6th one will fuck off elsewhere because they'll be getting shit on relative to the others. It'd be far better if all 6, or all 7, 8, 9, or 10 could get equal reward so that you retain the 10 best managers in the country, rather than stick yourself permanently with only the 5 best, letting the other 5 fuck off to your competitors.
The problem with your theory is that yeah, it works great for the top person, but what the fuck is the use in a system that means that 29 of your 30 staff just have no reason to be motivated? That's a complete failure of management.
I've personally not had a problem being in the top percentile myself, but I'd absolutely fucking hate to work under this system because it'd mean everyone around me was unmotivated meaning I'd be carrying the team - I want my coworkers to be motivated, I want them to do well, to be praised, to be given reason to care about their job, because that makes my life easier regardless of whether I'm a top performer, or a bottom performer.
At the end of the day these braindead systems exist because of inept managers who are either hiring the completely wrong people, or don't have the balls to tell someone truly inept, lazy, or incompetent that they're fired. These managers either can't actually figure out how well their staff are performing, or how competent they are, or they can, but just don't have any spine to do what's required to deal with them, and so they give them this absolutely failure of a crutch to try and automate the process for them but it merely serves to destroy motivation of those who can perform by giving them reason not to.
If you hire good managers you don't need this kind of crutch, the good managers will know who deserves what praise and reward, and who needs to be fired.
subject (Score:4, Interesting)
I believe my company has the same system, only the complete gutting of bonuses years ago and the fact that a stellar rating gets you around 0.3% more on the pathetic annual salary increase means that no one cares.
My last performance review contained two directly contradictory statements from my manager, in what I suspect was an uncorrected cut-and-paste from the previous year. I didn't bring it up, because either way I was getting the same shitty raise. That's motivation for you.
Re:How to survive (Score:4, Interesting)
My understanding of these systems is that they are simply budgeting protocol.
Company X plans to allocate Y funds to a bonus incentive pool. They have 5,000 employees. How do they distribute the payout?
This is where ranking comes in.
There are a known quantity of employees at various plan levels. There are a known quantity of teams of qualified employees.
Do the math to come up with an annual bonus payout and include that in your budget and your SEC filings as a component of operating costs. Keep a small buffer for surprise superstars.
It's not possible to do the math if you payout soley on merit unless you budget the highest payout for all employees. That is not rational and could hurt the company.
So ranking it is.
Re:Easy answer for non-americans (Score:2, Interesting)
Are you "speical"?
If I steal from you I violate your right to your property, I don't have to be a government to be violating your rights.
if I run a chemical plant and release toxic gas into your neighbourhood I can be violating your right to life.
If I abduct you and lock you up I can be violating your right to freedom of movement.
Governments aren't special. Companies or even individuals can violate peoples rights just the same.
When the government forbids someone from locking you up they don't "steal their right to freedom.". believe it or not the world does not revolve around you. other people have right too and sometimes those rights can outweigh other rights you'd like to have.
The right to property is no less artifical and no more important than the right to be free from discrimination or the right to life.
Re:Easy answer for non-americans (Score:5, Interesting)
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
Re:Easy answer for non-americans (Score:5, Interesting)
Unions are great IF they don't have laws written to give them special rights.
Unlike corporations, then.
Unions exist with special legal status precisely because corporations exist with special legal status.
A corporation is not a "a group of people freely associating to promote their self-interests": it is an inherently coercive organization protected by the full legal muscle of the various Companies Acts around the world. When a person employed by a corporation interacts with someone outside the corporation they are protected by a shield of laws that completely over-rides the ordinary operations of free behaviour.
So, if you really want unions to not have special legal protections, you need to eliminate the special legal protections given to corporations, which means you need to eliminate corporations as such, and go back to the situation before 1850 or so when the first modern Companies Act was passed in Britain. That system was unwieldy and inefficient, as no single entity with quasi-individual legal status (the corporation) could do anything like sign contracts, etc.
Yet for some reason I have never heard anyone who makes the kind of arguments you do against unions point any of this out. Why is that?
Re:Like nuclear war. (Score:4, Interesting)
Re:Lockheed Martin (Score:4, Interesting)
Re:Like nuclear war. (Score:4, Interesting)