[1][2] The often cited "80-20 rule", also known as the "Pareto principle" or the "Law of the Vital Few", whereby 80% of crimes are committed by 20% of criminals, or 80% of useful research results are produced by 20% of the academics, is an example of such rankings observable in social behavior.
[3] It's difficult to gauge how prevalent forced ranking is, particularly because companies have started using more anodyne terms like "talent assessment system" or "performance procedure".
[11] According to CEB, an average manager spends more than 200 hours a year on activities related to performance reviews, including training and filling out and delivering evaluations.
Adding in the cost of the performance-management technology itself, CEB estimated that a company of about 10,000 employees spends roughly $35 million a year on reviews.
[12][13] Rob Enderle has argued that "No sane person could sustain the argument for forced ranking once it's applied to products instead of people.
"[14] Jeffrey Pfeffer and Robert I. Sutton have criticized the practice on the grounds that there is limited empirical evidence of its overall usefulness to organizations.
Challenges to the model include: "C" player selection methods; the effect of office politics and lowered morale on productivity, communication, interoffice relations; and cheating.
[18] University of Virginia business professor Bruner wrote: "As Enron internally realized it was entering troubled times, rank-and-yank turned into a more political and crony-based system".
[19] Forced ranking systems are said to undermine employee morale by creating a zero-sum game that discourages cooperation and teamwork.
Deming stresses the need to understand organizational performance as fundamentally a function of the corporate systems and processes created by management in which workers find themselves embedded.
A high performer, unmotivated by such artificial demotion, behaves like a mediocre.”[23] MIT Research Fellow Michael Schrage has argued that the forced ranking policy has perverse effects even in organizations that are successful: "Organizations intent on rigorous self-improvement and its measurement inevitably confront an evaluation paradox: The more successful they are in developing excellent employees, the more trivial and inconsequential the reasons become for rewarding one over the other.
[...] The coup de grace occurs when the top employees are all told that they must collaborate better with one another even as they compete in this rigged game of managerial musical chairs.
For IBM, the main thrust of the strategy is to reduce workforce and shift personnel to lower-cost geographies by using a pseudo-objective rationale.
According to Jeffrey Hurd, AIG's senior vice president of human resources and communications, "Prior to this, everyone was above-average...You never really knew where you stood.
[28] Excerpt from The New York Times[29] Amazon holds a yearly Organization Level Review, where managers debate subordinates' rankings, assigning and reassigning names to boxes in a matrix projected on the wall.
[...] Many women at Amazon attribute its gender gap — unlike Facebook, Google, or Walmart, it does not currently have a single woman on its top leadership team — to its competition-and-elimination system.
Many Microsoft executives noted that company "superstars did everything they could to avoid working alongside other top-notch developers, out of fear that they would be hurt in the rankings", and that ranking stifled innovation, as employees were more concerned about making sure that their peers or rival projects failed than of proposing new inventions, turning the company into a "collection of non-cooperating fiefdoms, unable to catch on to many technology trends".
[32] The stack ranking system was relatively secretive for a long time at Microsoft; non-manager employees were supposed to pretend they did not know about it.
Detractors argued that the use of the system in small groups was inherently unfair and favored the employees who socialized more heavily over actual technical merit.
[34] Posts on "the curve" by Who da'Punk, an anonymous blogger internal to the company, on his blog Mini-Microsoft became a hot topic of commentary by other presumed employees.
In a memo to all Microsoft employees dated April 21, 2011, chief executive Steve Ballmer announced the company would make the vitality curve model of performance evaluation explicit: "We are making this change so all employees see a clear, simple, and predictable link between their performance, their rating, and their compensation".
[32][42][22][43][44] According to a subsequent article by Nick Wingfield in The New York Times Bits blog, "While that story overstated the harmful effects of stack ranking in the view of many Microsoft employees, it clearly represented the views of many others...The negative publicity around Microsoft's old employee review system reverberated loudly around the company, according to people who work there...The executive who spoke [to Wingfield] on condition of anonymity recalled Ms. Brummel saying: "I hope I never have to read another article about our review system ever again.