Note To Performance-Driven Companies: Yank Those Stacked Rankings!

There’s been a lot of chatter lately in the media and across social sites about the subject of stacked ranking (aka, “forced ranking,” “rank and yank” and few other colorful terms).

In case you’re not familiar with it, stacked ranking is essentially the practice of ranking

employees along a bell curve. Some employers use the rankings to openly compare workers’ performance (primarily as a way to motive those at the lower end of the curve to do better), while others actually use the rankings to fire underperforming employees.

BusinessWeek ran a story last month about Yahoo’s adoption of stacked ranking. Notably, it had this to say: “The Institute of Corporate Productivity says the number of companies using either a forced ranking system or some softer facsimile is down significantly from previous years. Companies performing well were less likely to be using forced ranking systems than those that weren’t. Just over 5 percent of high-performing companies used a forced ranking system in 2011, down from almost 20 percent two years earlier.”

In our experience, stacked ranking is most commonly used by enterprise-sized companies—those with seriously large employee populations. While this might make sense to some degree, we would never recommend stacked ranking to any employer, no matter how large its workforce is. The reason? The practice can easily become misleading, unfair and demotivating. Equally important, it can stretch out the review process unnecessarily.

Under stacked ranking, a manager is able to give a particular ranking to only a limited number/percentage of employees. (For example, only about 10 percent or so of a group can be ranked as “top performers,” and so on down the line including a specified percentage who must be ranked as “poor performers.”) Once the manager has dispensed the total allotment of a particular ranking, she/he must give all other employees a different ranking—even when these employees deserve to be put into the already-filled ranking. Managers often find it an arduous and time-consuming exercise to carefully work through the problems this system causes and distribute employee rankings as fairly as possible.

In addition, stacked ranking can be demotivating to employees. Example: using a scale of 1 to 5 (1 being poor and 5 being excellent), manager Jane rates employee Dave a 3. Dave deserved to be rated a 4 but all of the 4s were already handed out. Jane explains this to Dave and sends him on his way, thanking him for his performance. How do you think this is going to sit with Dave? Maybe he’ll trot back to his desk happy, engaged and motivated to do even better … but we wouldn’t bet on it.

Bottom line, employees should be rated according to their merits—not according to a predetermined scale or a set of forced categories.

In other words, for truly performance-driven companies, stacked ranking simply doesn’t stack up.

5 Must-Have Features for Your Performance Management Software

Talk about your troubling data …

Asked to describe their confidence levels regarding their own workforce management, employers surveyed by Ventana Research were nearly evenly split: while 51% expressed moderate or high levels of confidence, 49% are only somewhat or not at all confident.

That’s troubling enough but when asked about their workforce management systems:

·      Just 41% said they’re satisfied or very satisfied with their current system.

·      42% are only somewhat satisfied.

·      15% are flat-out unsatisfied.

·      And another 45% indicated they need new applications to improve their workforce productivity and results.

It’s no wonder that talent and performance management software are among today’s most sought after HR solutions. After all, these solutions deliver a powerful set of benefits including greater productivity, stronger employee engagement, better alignment between company strategy and employee performance, and a stronger capacity for conducting sound succession planning.

So, whether you’re in the market to buy new performance management software or you’re simply looking to upgrade your current solution, remember this important (and often overlooked) guideline: don’t compromise ease-of-use just to get the features you want.

Sure, the solution you choose has to offer the right features. No doubt about it. But if the software is difficult to use, your people will avoid it. No amount of training or clever “promotion” can overcome difficult software. In the end, you’ll not only waste your money but you’ll also let down your customers (i.e., your managers and employees at large) and your senior leadership. And you’ll have gone a long way toward losing their trust.

Fortunately, with the array of robust performance management solutions now available, you don’t have to compromise ease-of-use for features. Not if you do your homework properly and research your options online.

However, when it does come time to consider features, certain ones do top the lists of most organizations. In our experience, are five must-have features:

1.     Customizable Performance Review Forms—Cookie-cutter reviews are worthless and a waste of time. The same is true of cookie-cutter software. If a solution doesn’t allow you and your managers to tailor it your needs, move on to another option.

2.     Goal Management Tool—Having the ability to manage and track concrete performance goals is not only wise, it’s an imperative for any company that wants to become truly performance driven. A goal management tool that can be used/accessed throughout the entire year (or performance cycle) helps to maintain strong alignment between employee performance and the company’s goals and targets.

3.     Journal Entry/Notes Tool—This is an especially useful feature—not just for managers but also for their direct reports, as it helps to keep both parties informed and engaged in ongoing communication about goals, action items, areas for improvement, education and developmental matters, etc.

4.     Strong Reporting Function—This makes it easy for managers and HR to run performance reports, conduct proactive succession planning, and share this information efficiently among key personnel, department and functional heads, and senior leaders.

5.     eSignatures and Automated Notifications—These are features that enhance compliance, facilitate administrative actions and maximize convenience—all of which help to ensure that people actually enjoy and utilize your software.

If you’re looking for added value, be sure to explore software that offers these additional features:

1.     360-Degree Feedback Module

2.     A Learning Management System and Learning Content Integration

3.     Compensation Management

4.     A Mobile App

These features are becoming increasingly attractive to organizations that value comprehensive solutions that can be accessed from a wide range of devices and technologies.

Bottom line, you no longer have to sacrifice ease-of-use to get the features you need in your performance management software. Research your options carefully and you’ll make the right choice. Even better—you’ll help your company become significantly more performance-driven.

From the Flight Deck: Clear a Runway for Your High Performers

A Bersin by Deloitte study has shown that organizations with highly effective employee development plans have about twice the revenue per employee as organizations with poor plans. And earlier research from Bersin & Associates revealed that senior leaders who coach and develop employees (and who hold others accountable for doing so as well) are three times more effective at producing improved business and talent results than those who do not.

Of course, to get these kinds of results you can’t rely on a one-size-fits-all employee development strategy. You need to tailor strategies to fit your people. One perfect example: design strategies specifically for your high-performing employees.

These are the individuals who keep your company running right now. Their work and their contributions are vital to your success today. Don’t confuse high performers with high-potential employees—those who aspire to holding top leadership roles within your company. While high-potential employees are often high performers, high performers don’t always have their hearts set on holding senior leadership roles.

Distinguishing between these two groups is important because your high performers need their own “runway” to maximize their success. This runway includes dedicated development plans and budgets as well as timely, ongoing performance assessments to ensure their work remains aligned with key company goals and targets. Without these regular assessments, it’s all too easy to allow high performers to keep plugging away at tasks and responsibilities that no longer reflect the company’s evolving needs and goals.

Here are three tactics that you can use to help your high performers take flight:

1.     Set clear expectations with managers: Give your managers a clear understanding of what high-performance behaviors are—and how they might vary by function, department, team and role. Sharing these expectations makes it easier to identify high performers and communicating back up the chain to executive leadership who those individuals are. It also makes it easier to build out development plans and anticipate what an individual’s or group’s productivity will look like after further development.

2.     Manage performance proactively: True performance management is relentless and requires proactivity—anticipating the challenges you’re your employees will face and then providing them with the tools, guidance, support and constructive feedback they need to overcome these challenges as quickly as possible. Development doesn’t always have to focus on the long-range or on future roles. And don’t forget to reward success. While simple recognition and pats on the back are useful, they’re not acceptable on their own where your high performers are concerned, especially not for those making serious contributions to the organization.

3.     Keep everyone on track: Make sure that high performers are getting the support they need, particularly when their work environment changes or becomes chaotic. Temporary assignments and rotation of team members, for instance, can decrease the productivity of even your highest performers. Managers should focus on the individual performance of team members first and then look to manage disruptive external factors. Managers who put performance first—and do what they can to facilitate success—also build trust with their teams.

Some employers are tempted to focus most of their resources and attention on high-potential employees because they foresee a greater/longer return on their investment. But this is a mistake. While high-potential employees are important, high performers keep our businesses running in the here and now. Ignoring them can prove far more costly than we imagine.

Download our white paper, “Giving High Performers a Runway,” to read more about creating robust development strategies for your company’s high-performance employees.