Wednesday, December 4, 2013


Recently, the corporate evaluation process known as "stack ranking" has been in the news. Microsoft ended (or, depending on who you ask, merely altered) the practice and Yahoo started it almost immediately thereafter. Generally, speaking, the process is commonly described as working something like this - A set of grades or tiers is described and assigned percentages. So one could create five ratings, A through E and assign 20% to each of them. Come review time, everyone is placed into a bucket based on their performance relative to one another. People who wind up in the bottom group are in career trouble, as they are now on a track to be fired as poor performers, earning the process the unflattering name of "Rank and Yank."

Depending on your viewpoint, Jack Welch deserves the credit or blame for introducing this method to corporate America, and it was perhaps with this in mind that Mr. Welch took to a column on LinkedIn to defend the tactic. Welch started out by railing against the nickname of "Rank and Yank" saying:

Because most experienced businesspeople know that "rank-and-yank" is a media-invented, politicized, sledgehammer of a pejorative that perpetuates a myth about a powerfully effective real practice called (more appropriately) differentiation.
Differentiation, like any other practice, has to be correctly implemented to be effective. No real practice can be "powerfully effective," without a powerful commitment to making sure that it's done correctly. Mr. Welch, throughout the article, touches on things that have to be in place for differentiation to work, but never demands accountability from corporate America for ensuring those things are in place, preferring to attack the practice's critics - and in doing so shift his defense from the practice itself to the people practicing it, whom he seems to universally assume have implemented it in a manner that would meet with his approval. Although Mr. Welch does say that some companies undoubtedly leave parts of the process out, this doesn't prompt him to call upon companies to make sure that those parts are actually included. Instead he makes it into a failing of individual managers.

There is a difference between defending a process and defending organizations who implement that process. And for all that Mr. Welch has been a sucessful businessman, he doesn't clearly make that distinction. And in failing to do so, he misses an opportunity to educate, rather than castigate.

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