Employers’ ruthless performance evaluation system
Credit to Author: The Manila Times| Date: Mon, 03 Jun 2019 16:17:55 +0000
MY EXPERIENCE in the academe and the corporate world gave me a contrasting view on how performance appraisal system can be used to measure the performance of students and employees.
In the academe, students could take revenge against teachers for giving them poor grades. Shortly before the final examination, students having trouble, and by being anonymous, can anticipate giving teachers bad rating. Conversely, if students are getting good grades, they would be thankful to teachers by giving them good rating as well.
This is the adverse effect of “grade inflation,” which according to Barry Nalebuff and Ian Ayress, co-authors of Why Not? (Harvard, 2006) is “caused by a poor incentive scheme given to faculty. Students will give their professors better evaluations if they receive higher grades….But when everyone does this, we end up with grade inflation and meaningless transcripts.”
In the corporate world, workers don’t have a similar choice. They have to accept their fate unless an organization has a grievance machinery, whistleblower program, open-door policy or a strong union, not necessarily in that order. When a worker gets a poor rating, he is placed on a Performance Improvement Plan (PIP) for six months. It’s like placing the worker back to his probationary status. If he fails to pass the grade, he’s instantly removed from the payroll.
To avoid conflict, the mandate of employers is for everyone to come out with the most objective and bias-free evaluation system to make it useless for any worker to challenge it. This is the ultimate weapon of employers readying themselves against the “Security of Tenure” bill if it becomes a law. This is the unintended consequence of the bill that runs counter to the interest of regular workers.
Remember, this is the Philippines where we often experience managers being overfriendly to their workers for the wrong reasons or maybe for the wrong notion that we live in a compassionate society. Even if a dead wood is close to burning at the stake, his manager, due to kinship, compassion, or whatever reason, would save him by giving an “average” performance rating, resulting in the mockery of the performance evaluation system.
That’s why people and organizations, to guard against subjectivity, would often use the “Bell Curve” that tells us if there’s an abnormality or “skewness” when a sizeable number of workers are given “above average” rating and “average” rating even when they’re not entitled to it.
What’s objective and normal is when you have majority of the workers receiving average rating. Roughly speaking, a normal “Bell Curve” would look like this in percentage: 5 percent for “excellent” workers, 20 percent for “above-average” performers, 50 percent for “average” performers, 20 percent for the “below-average” performers, and 5 percent for “poor” workers. However, in recent years, even the “Bell Curve” is being ditched by employers wanting to level-up their performance standards. One latest example is in the case of Facebook’s assessment tool branded by former employees as “ruthless” when compared to other tools.
Even an “average” rating can’t save you from being thrown out of work if your evaluation form is marked with “meeting most” expectations — which means you’ve to improve on some work standards. In his article for Business Insider, Nick Bastone reports “the above average mark is not good enough at Facebook, where the company stack ranks employees and terminates those not among the top performers…“Facebook’s job evaluations are so ruthless that ‘meeting most’ expectations could lead to getting fired, former employees say.” Only those who got “excellent” and “above-average” ratings would remain employed with Facebook. If you get a rating of “meets most” expectations, you will be placed in a PIP where your work is closely monitored, supervised and evaluated. And if you failed to cut the mark again, you will be promptly notified of your dismissal from work.
Facebook denies the accusations of former employees who are ranting much against such practice called “stack ranking” — a ruthless policy popularized in the 1980s by Jack Welch when he was chairman and chief executive officer of General Electric. Stack ranking is also known as Vitality Curve, Forced Ranking or Rank and Yank.
This controversial practice requires managers to rank all employees from the highest to the lowest, if only to identify people at the bottom of the totem pole. As soon as they’re identified, they will be placed on PIP for their second chance.
The “stack ranking” worked well for GE, but not with so many copycat-companies, including many technology-oriented companies like Microsoft, IBM, Yahoo and Amazon, according to Bastone.
The unpopularity of “stack ranking” is brought about by many controversies that organizations are now using politically-correct name while retaining the same old concept that requires managers to rank their employees to identify the “bottom 10%,” according to Leslie Kwoh of The Wall Street Journal.
So, what’s the chance of “stack ranking” gaining ground in the Philippines? It’s likely, except that organizations with militant employees would push employers to choose the 360-Degree Feedback instead so they can be like anonymous college students having their own sweet revenge against teachers.
Rey Elbo is a business consultant specializing in human resources and total quality management as a fused interest. Send feedback to elbonomics@gmail.com or via https://reyelbo.consulting
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