The sad thing is that the managers participating in these sorts of activities are unable to connect cause & effect.
For example, if you rank individual employees then you destroy teamwork and incentivise all sorts of behavior that's bad for the company. It hurts morale, lowers productivity, increases employee turnover, increases hiring costs, lowers product quality, etc. It's a vicious cycle. And for someone who thinks it's a good idea to rank employees, these effects will simply confirm their beliefs that they need to rank employees.
Why does this happen? In the best case, it's a misguided attempt at career development. Or it's a way to figure out who to give more money and who to fire. Usually there is an element of fear: "I'm afraid my employees will not work hard unless there is the threat of a bad performance review".
To be fair, ranking employees does sound like a good idea if you don't know anything about humans. Most management activities are really just things that sound like a good idea (but fall apart under scrutiny). To be more fair, bad management is the norm, so no one has good mentors and role models. "If everyone else does this, then it can't be wrong." It's another vicious cycle.
I would like to make your point clearer because I think there isn't sufficient visibility of this problem in our community.
The problem here is 'stack ranking' or 'curve fitting'. The assumption behind this model is that the quality of workers you have will mirror a bell curve ( for example, 10% will be poor, 80% will be average and 10% will be excellent ). The management tries to identify these individuals and assign them ratings based on this assumption. Your promotion, bonus and pay hike is based on these ratings. The problem with this approach is that no matter how well you perform there are only 10% 'very high' ratings available. This means that if someone else succeeds, then the chances for your success has diminished. This creates an incentive for you to sabotage others at work and pitches team mates against one another.
I worked at a place that stack-ranked, and we didn't have this problem. It was typically pretty clear and well-accepted (by both leadership and peers) that high performers were in fact the best people.
In a big enough company, you can't sabotage other people (because you might not work closely with them) and it's pretty transparent when you do so.
The problems I saw were threefold:
1) Bad Managers - Far and away #1. The example of a manager leaving the ratings meeting comes to mind. Conversely, a manager who just has it out for you: that's the sabotage that I saw on more than one occasion (but that's not exclusive to stack ranking). [Edit: also worth noting that word got around and bad managers were avoided, so the system eventually would self-correct.]
3) Comparing Stretch Roles - Pure performance is tough. I never thought we gave enough credence to great people doing good in tough roles vs. good people doing great in easy roles.
3) Comparing Different Impact - We got to the point where we were trying to compare developers with business analysts. The former would have outcomes like "developed 75 test cases" and the latter would be "convinced the CEO to invest $1M". It didn't help that the business managers were better at quantifying outcomes than IT managers. (See #1.)
You can easily sabotage people in large companies, probably more easily than in small. Just don't offer support when you could. Start gossiping. Gang up with one or more other people and make it seem like the other isn't a team player.
I would go as far to say it is easier to do in a large place as you have more of a buffer between you and actual work. So then you have more time to concentrate on politics.
Those actions are the same at every level of company. I think it's harder at big companies because you don't have the opportunity to offer (or withhold) support or create perceptions about people you literally might never come in contact with.
If you're doing that to someone on your team, (good) managers will notice the disconnect.
Look, is it possible? Of course: in every environment. The person who's going to be unethical and sabotage others is going to do so regardless of whether stack-ranking is involved.
> The person who's going to be unethical and sabotage others is going to do so regardless of whether stack-ranking is involved.
The trick is not to think about people as purely ethical or unethical. Imagine, if you would be willing to tell a small child, right before an arithmetic exam, 1 + 1 = 3 for $10 billion. Will you do it ? The harm is probably very low ( someone is probably going to correct the child anyway ) but you get to make $10 billion. Clearly the good it does to you far outweighs the bad it does to the child. You may not be evil in this case, and different people have different thresholds for it. There is no one so ethical that they would never lie to a child at any price. This premium increases with higher and higher crimes. Also the premium decreses the more desperate you are.
People with higher premiums for same level of desperation are better than others.
Stack ranking incentivizes people to stab each other in the back. Some people will take the incentive. It does not necessarily mean they are unethical.
It's definitely possible and it's happened to me more than I'd like to admit. I feel a lot of it stems from folks not stepping in and admitting theirs or others' faults.
I did a second tour a baml and did some of their release management. We hired a new guy who was technical and smart, but never listened to training since he was busy texting all the time. So, when he typo'd and all builds started failing, the fault was put on my shoulders and didn't want to admit fault. My manager wouldn't listen to what actually happened. I think I was out of there maybe two months later after they chose not to renew my contract (which thankfully force broke some golden cuffs). The guy who messed up is still there, I think. tl;dr baml sucks.
Another time at a medium sized company, there was a new ~really cool~ NOC being built that everyone wanted to check out. My boss took everyone up, but a locked door was in the way and I was given permission to open it with a CC. A week later, two other guys on the team did the same thing, got caught by security, and almost got fired by the CTO directly. My boss, at no point, stepped up and admitted he did the same. When talks of firing started, I made it very, very clear to him that if those two got fired, I'd make sure that both of us would be fired, too. Nobody was fired, so it might have actually worked, but it's incredibly shameful that of five others involve, nobody stepped in to add correction.
That same place also created artificial competition by only having one fulltime opening for the 6 contractors. Lots and lots of subtle backstabbing as a result. When they gave me the position over the other guys who'd been there for a lot longer, things became very oddly hostile.
I have more stories like this, and yes, it happens at big, large and medium companies, but it's so much easier to do it at bigger companies.
You can easily find teams of 5-10 in any company with no duds in, but the nature of stack ranking is that every year someone is going to have to take one for the team. If you don't know who the sacrificial goat is, it's probably you.
Yes, but you're not stack ranking in only teams of 10. You're stack-ranking 10 teams of ten. Out of 100 people, I can probably find 10% who are duds vs. their peers, but they might you might have teams with 2+ low performers.
You take a high performing team and rank its members. You take a low performing team and rank its members. When the numbers go to the next level up, the worst person in the good team and the worst person in the bad team look the same to the system - even if the worst person in the good team is better than the best person in the bad team! This is how the system works in practice. Good people get shafted because they sought to work with other good people.
So in a vacuum, yes people probably perform on a bell curve. But that bell curve is self-aware and will start sabotaging itself if you incentivize it to.
That's exactly the problem. You're assuming that there is a single metric of "best" that you can rank people on. Even in programming, there are a number of separate skills: algorithm design, systems architecture, debugging, etc. Is a programmer who can sit down with an unfamiliar codebase and be productive with it in a week's time "better" than a programmer who is great at designing scalable systems from scratch? You need a mix of technical skills, not just a team overloaded with whatever people and skills a particular manager finds interesting.
I think the biggest problem with your statement is that you're trying to identify the best people, rather than the best teams.
I'm just posing the question. We can assume that the HR people at Goldman Sachs are not idiots. There was no obviously better system or they and many other companies would have used it.
So lets say you identify the best team (itself a flawed concept - is sales more important than development, since they bring in the cash?) , then do you propose to treat everyone in the team the same? What about the new hire into the team who is struggling and should never have been a developer in the first place? What about the lazy stoner? What about the girl genius who reworked the problem areas over a weekend? Should they all get the same raise because they're on the same team?
you're spending an awful lot of time worrying about hypothetical people.
your argument would be more convincing if you started to explain your reasoning rather than just throwing out a list of cliches of "undesirables" in your opinion.
ok, lets keep playing the hypothetical persons game then.
the lazy stoner? sure he smokes up at home and comes in to the office late basically every day. he's also an outside the box thinker who pioneers the use of new technology on his team, and is an expert debugger who can view problems from angles his colleagues haven't considered yet and maybe never would have.
the new hire who's struggling? its not her technical ability thats lacking, she's just going through some shit in her personal life. her father is sick with cancer and she's splitting her time between her tiny New York apartment where she lives with 3 roommates and her parent's house in the suburbs where she helps her overwhelmed mother catch up on laundry and sweeping the floors at home.
the girl genius who reworked the problem over the weekend? well she's an arrogant workaholic and constantly talks down to her coworkers and drains the morale of the team. she spends a lot of time thinking about ways to make herself look better to the boss and eagerly takes full credit for projects she collaborated on with 5 other people, but she doesn't mention that at her quarterly review meetings.
If your point is that its hard to measure people's true performance, then yeah, sure.
If your point is that everyone should be paid the same because its too hard to ascertain actual performance, then you better find a gig on Cuba or some other functioning communist society.
You can apply selection when you form a new team for a new project. Then you select the best people for that project. Ranking scores are unidimensional, absolute evaluations of people. They can be abused by adding penalties based on frivolous criteria.
In China, Ali Baba and others have created a ranking for regular population, called the "social credit". If you make friends with someone who has a low rank score, your own score will be penalized (they want to control who people make friends with and socially isolate people by descoring them). Also, if you watch too many American movies instead of Chinese. These scoring systems (and even Google's Page Rank) pervert the normal behavior of people.
On the latter point, I think this will become more prevalent in the future, and has really interesting applications in displacing trust as a dependency in interpersonal interactions.
Once we have more accurate profiles on individuals, and the profiles are shared more widely, you could make much more informed decisions about who you want to share public spaces, interact, work, live, or even enter into relationships with.
By not rewarding based on "the best" (which implies comparison) and instead based on performance. Set realistic and definable targets for such rewards and follow through. Additionally, communicate these targets clearly. Allow for additional rewards for team performance.
I believe this maximizes the motivation you get from rewards both on an individual and team level creating the "best" you can get.
Although, realize, studies have shown rewards generally don't impact performance greatly.
A good team has people with a mix of skill sets. The "best" people depend on your choice of skill, but multiple skills are required to excel and it's almost certain no one person will be best at all.
Sometimes it's the gestalt of the team that works well; sometimes there's simply no easy way to isolate contribution.
Why does this happen? In the best case, it's a misguided attempt at career development. Or it's a way to figure out who to give more money and who to fire. Usually there is an element of fear: "I'm afraid my employees will not work hard unless there is the threat of a bad performance review".
To be fair, ranking employees does sound like a good idea if you don't know anything about humans. Most management activities are really just things that sound like a good idea (but fall apart under scrutiny). To be more fair, bad management is the norm, so no one has good mentors and role models. "If everyone else does this, then it can't be wrong." It's another vicious cycle.