I’ve commented that forced stack ranking is destructive. But would I ever use it? Yes, absolutely.
But only for very specific objectives and only for limited time.
And that’s the key. Forced stack ranking is a very blunt instrument. It applies an ax where a scalpel is more typically needed. However, that blunt instrument may be just what is needed when:
- A clarion wake-up call for team managers is needed due to an extended period of supervisory ineffectiveness.
- Members of a team need to understand that accomplishing performance results is not optional.
- You are convinced that you don’t have the right members on the team and you need to do some fast pruning to clear out and re-build the team – and you’re ready to do the repair work that will be needed afterwards, because repair work will be needed.
Here’s an example that may illustrate:
An 8-person sales team has consistently under-performed and failed to meet sales goals over the past year. The sales manager is firmly entrenched in the belief all of the manager’s people are really good, it’s just been a tough year. An analysis of the activities and results on an individual by individual basis indicates that 2 members of the team are getting excellent results and, in fact, are carrying the team. Review of the sales manager’s coaching notes shows that the sales manager is coaching appropriately and challenging members of the team to perform the appropriate activities. However, the company cannot sustain the low sales results and continue to carry the expense of the entire team.
The sales manager was required to stack rank the people on the team for effectiveness, performance and overall contribution. The sales manager was also required to post sales and activity results by team member. The sales manager was placed on a performance correction plan for overall team results. Team members not meeting targets were placed on performance correction plans for both activities and results.
Eight months later, 40% of the team had been replaced, but 80% of the new team were meeting sales production targets, and 100% of the team were meeting scorecard targets for activities.
Here’s another example with a professional services organization:
Practice area managers were not willing to differentiate their team members because all had been highly recruited from top schools in their professional discipline and all had graduated in the top 10% of their classes. To the practice area managers, all were very good and the managers saw no grounds for differentiating. The challenge was that this was demonstrably untrue. These same managers made conscious selections among the team members when staffing client engagements, they were just unwilling to provide the candid performance and skills feedback that should normally accompany the selections being made.
The business challenge was a limited budget for compensation adjustments combined with the imperative to retained the best talent for the organization.
The practice area managers were required to stack rank their team members. This forced the managers to apply more discipline and rigor in assessing who among these team members were in fact making the greatest contribution and developing the greatest professional skills. Practice managers hated this because it required managers to give more candid and honest performance appraisal feedback to team members — something the managers should have been doing and something the organization needed the managers to do for the health of the business.
Over the course of 3 years, managers learned the skill of providing candid performance feedback that the team members needed to hear. The organization was able to make more meaningful compensation differentials that truly rewarded top performance, not just longevity in the job. At the end of 3 years, the forced stack ranking discipline had served its purpose. It had by that time been replaced by the coaching, candid feedback and objective assessment which had become the new norm.
So, would I ever apply “forced stack ranking?” Yes, these are examples from my experience. Forced stack ranking can work at the tactical level to solve very specific problems, and I would not shy away from its use when appropriate.
But when executives apply forced stack ranking across the board as the culture of the organization, one begins to get very bad results. The old rule of “unintended consequences” becomes very apparent and the culture that evolves can be toxic and destructive, as discussed in my earlier article.
If you want to build a culture of sustained high performance in your organization, I would be pleased to work with you to achieve that result.
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