by Garold L. Markle
There’s something inherently wrong with the ritual of rating and ranking practiced by some of the world’s largest and most prestigious companies. Let’s talk about two of the problems here. First, the negative way it often makes employees feel. Second, the complete failure of this elaborate and labor intensive process to yield anything worth paying for, starting with behavioral change that impacts the business.
I’ll never forget sitting through my very first performance evaluation at the Fortune 500 Company where I was lucky enough to secure a staff position in Training & Development. I’d not been there for the entire first cycle, but I guess it was long enough to participate in the evaluation experience. My white haired boss and mentor read through the twenty-plus pages of tick marks informing me of how I was rated on each of a seemingly endless number of so-called “competencies” – attributes of perfection to which all good employees should aspire.
Most of what he said was quite flattering and nothing he rated me on was below average. On the other hand, very few of the line items received a top score. I was simply too new to merit the top ratings, according to his line of thinking.
There didn’t seem much to argue about until we got to the end. He summed it up by saying that my overall rating was “Very Effective.” In our system, there were two grades above that: “Outstanding” was the top and “Exceeds Expectations” was second. Average equated to “Meets Expectations.” Below that was the dreaded “Fails to Meet Expectations” and at the bottom of the barrel was the frequently fatal “Needs Improvement.”
When I asked him how he determined my overall rating to be a “Very Effective”, he explained that I was new. In our system, grades were assigned on a bell-shaped curve. It was a zero sum game. Each grade category had a mandated percentage of occupants. For someone to go up, someone else had to go down. In a failed attempt to soothe me, my manager informed me that my entering the organization had resulted in more than half of my peers going down the rank list. In essence, my success meant their failure. Yet, he continued, I wasn’t yet established enough to knock off those above me. That was my obvious next goal. Welcome to the Hunger Games!
After digesting the simple horror of that situation, I asked him who was above me. He quickly replied that he couldn’t discuss that. He suggested quietly, however, that I could probably guess and very quickly I surmised that my biggest competition for grades were the two women I’d followed into the HR professional ranks. One had a Master’s degree and the other just a Bachelor’s. Both were simply awesome. Smart, interpersonally gifted and highly focused on their careers. They’d left a sizable trail of success for me to follow.
My next question was, “What do you think I should do differently next year to receive a better rating?” His reply, “You’ll probably get to move up when Theresa or Ana (not their real names) get promoted out of your rank group or leave for headquarters. Perhaps one of them will screw up or take some time off to raise a family. Other than that, keep doing what you’re doing.”
I left that session with nothing more than I started, other than, perhaps, the beginning realization that my so-called “teammates” could be more accurately described as my competitors. It also helped explain the downcast eyes and obvious mixed emotions expressed by colleagues when I received positive public recognition.
It took a while longer for me to realize the depth of the damage being done on the larger scale. As my boss forecasted, I ascended in my second year to the next level (“Exceeds Expectations”) and spent most of the rest of my corporate career in that grouping. I didn’t get the top rating very often, but there were rewards aplenty for those who could secure a spot on the second tier.
I didn’t stick around long enough to be a true casualty of the game. Had I stuck around long enough, it would have undoubtedly come. An HR generalist would never be in the running for CEO of a multi-billion dollar oil and gas company and eventually I would have been compared poorly to those who had a shot. In a kill-or-be-killed world, getting taken out by a younger, faster, brighter foe, I mean “teammate,” was inevitable.
What I eventually realized was that the system I was in created a surreal Darwinian universe where 90% of the employees felt like losers and the other 10% were paranoid. The only way to go up in rating was for someone else to go down.
I guess a true believer could argue that the collateral damage was worth it, if something magical came out of the other end of the process. Rapid positive behavior change, for example. That simply wasn’t the case.
When I started to notice widespread damage caused by the performance evaluation ritual, I began asking people a simple question. “What are you doing differently following your performance review?” Their faces were almost always blank. Many answered my question with a question. “What do you mean? I mean, do you want me to say that I’m going to work harder? Is that what you want to hear?”
Think of all that wasted time and energy. All that file documentation to justify what? Something that anybody observant could have figured out in five minutes by looking at the situation. We had three bright up-and-comers in our department and their ultimate value was roughly a function of seniority. The grand majority of the others in my comparison group were pretty much at career potential. Frankly very few of them even aspired to more. And yet, three dozen managers had to fill out twenty pages each giving their direct reports grades that somehow corresponded to their overall assessment. They had to find critical things to say about the people rated average or below, even when they didn’t really have any meaningful advice for them about changing their behavior. Is it any wonder so many people found the ritual dehumanizing and emotionally draining?
Rating and ranking, like The Hunger Games, is an enormous and all-consuming ritual. It also defines the culture in which it is practiced. For many, it’s hard to stop. After all, what would we do if we didn’t let this elaborate ritual consume critical time on our calendar? How would we survive without our blood-stained lists?
Wouldn’t it be fun to find out?
So, what can we do to put an end to The Hunger Games at your company?
- Deming’s Advice: W. Edward Deming, father of the modern Quality movement, was a strong and vocal opponent of both rating and ranking. He called the ritual one of the “7 Deadly Diseases” that Americans were spreading to other countries. When asked what to do instead, his advice was straightforward: “If your system does more harm than good, just stop doing it. That alone will be an improvement!”
- Stop Evaluating and Start Coaching. Consider adopting Catalytic Coaching or another program that is built around dialogue without the distraction of labels or grades and without the negative drama of pitting employees against each other in open competition.
- Succession Planning. Make a list of people who are “silly enough to want more responsibility and good enough to earn it” and place their names under the jobs they aspire to. Describe them as Ready Now, Ready in 2-3 Years, or Ready in 5 Years. Rank this list in isolation. Do not pit them against others who are happy doing what they’re doing in another job.
- Work Your Performance Problems. You don’t need to grade everyone to determine who the underachievers are. If someone fails to meet expectations in their position or they do something so egregious that it makes you actively consider firing them, talk to them. Confront them about their performance gap and give them assistance to quickly resolve it. If they can’t or won’t, take action and move on.
- Challenge Your Stars. Identify your highest potential employees and get them to ask you to be tougher on them than you are their less stellar peers. Give them the best salary treatment you can, by the way, but raise the bar in terms of the skills you challenge them to acquire. They’ll stick with you longer, rise faster and go farther with the extra attention and constructive guidance.