
A CEO's passionate defense of stack ranking - mathattack
http://management.fortune.cnn.com/2013/11/19/stack-ranking-employees/?iid=HP_River
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forgottenpass
_At GE there was only one objective, and that was to force honesty_

I thought the purpose was to fire thousands of GE employees? Most of the
articles I've read on this make it should like whatever problems/frustration
it caused at Microsoft stemmed from the fact they were using stack rank
without the goal of reducing headcount across the board.

~~~
mathattack
Maybe he's not being honest with himself? :-)

But I have heard elsewhere that a big reason behind doing this is it forces
managers to not be wishy washy telling everyone how great they are. It's very
hard to enforce the discipline of tough conversations in organizations where
there are long lines of people waiting to be promoted. GE is a prime example
of this. People aren't there to invent great technology, or make a financial
killing. Therefore the senior engineer doesn't have status. It's the senior
manager that does.

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judk
TL;DR: He believes everyone performs on a single measurable dimension and
teamwork is irrelevant. He thinks that forcing a ranking is the only way to
get honest feedback from a manager, and believes that a contributor's manager
is the one person suited to judge that contributor.

That's not actually a TL;DR, that's all he said in his "passionate" defense.

~~~
dpark
> _That 's not actually a TL;DR_

Agreed. It's stuff you made up. He didn't say everyone performs on a single
measurable dimension, nor that teamwork is irrelevant (nor does stack ranking
imply either of these).

He also didn't say that forced ranking is the only way to get honest feedback.
He said it's the only way he knows of, which is a considerably different
statement.

To be clear, I'm not defending stack ranking here. Muddying the facts with
blatant mischaracterizations does not help the discussion, though.

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blm
I guess I don't understand something. Everywhere I have worked has had a
ranking of employees such that when finances become difficult they knew who
they would make redundant first. To me this is also stacked ranking.

The problem with some implementations is that it awards people for individual
contributions and only if you are above average. This drives people to avoid
contributions to a team so they can focus on their own personal contribution
and to not want to help colleagues because that would drive the mean up
eroding the value of personal contributions.

Couldnt you have stacked ranking with a criteria that rewards all involved for
collaboration?

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ScottBurson
The biggest problem with stack ranking, as I have read about it being
practiced, is that it is implemented on a team-by-team basis rather than
across an entire engineering department. The consequence is that differences
in strength _between_ teams are not taken into account -- the members of each
team are ranked only relative to the other members of that team. This leads to
people trying to game the system in various ways to make sure they're not seen
as the weakest on their team.

Ranking all engineers in the department together would be more difficult.
Managers have a hard enough time getting a read on the strength of their own
people; getting them to agree on how their people rank against the other
managers' people would take quite a bit of work, I imagine. But it would give
a much better answer to the question of whom to let go first, and it wouldn't
provide as much incentive to game the system.

And I agree with you that the ranking should explicitly emphasize how well
each employee works with their teammates.

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cratermoon
What he's saying is that he's willing to have crappy managers around who are
unable to give honest feedback. Rather than improving management, just use
some mechanical system to "force" them to make choices.

Good people will "choose" to see work elsewhere.

In case this isn't clear to anyone, a manager could have a team of the 10 best
people in the company, but given forced stacking and how teams are set, 1 of
those people would be a candidate for termination in layoffs, even if there
are 99 other people less capable and less critical to the company. No manager
will be allowed to keep everyone -- they're all told to rank them and the
decision to layoff the "bottom" 10% is done by HR.

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hga
Hmmm, I have a personal data point on their IT sophistication, they had to
hire the firm I was working for in 1997 to start tracking banner ads.

And their 2007 IT outsourcing deal is pretty infamous.

I never got the impression it was a company I'd want to work for.

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mathattack
GE or Nielsen?

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hga
Nielsen.

~~~
mathattack
Can you share more on why it's a bad place to work?

They seem to be in a hot area now - consumer products data.

~~~
hga
Well, it's more of an impression than an informed opinion, but if you're
interested use your favorite search engine with, say, Nielsen india
outsourcing to start with.

I should also emphasize from hard, personal experience that how "hot" the
area(s) a company is working in is pretty much orthogonal to whether you
really want to work for them. Especially a company with such an established
brand name and cash cows, which can allow a whole lot of awfulness without
killing the company, at least for a while.

I mean, for about half their IT staff it was a _terrible_ place to be in
2007-8 when they were laid off, but not before training their non-resident
Indian replacements. Or to put it another way, IT isn't a respected part of
the company, obviously viewed as a cost center. _Really_ try to avoid those
sorts of outfits if you can afford it.

And their CEO loves stack ranking ... surely that's enough to cool enthusiasm
prior to carefully examining the company (e.g. check out the Ask The
Headhunter approach).

