Performance Management: Time To Rethink How We Do Them

(This post was written by Rick Dacri on December 1, 2013)

Time to rethink how we evaluate employees. Many companies have put in place programs that either punishes employees or on the other extreme, gloss over performance problems that badly need addressing. Neither work.

Good performance systems critically evaluate performance with the goal of improving individual performance and by extension improving the overall performance of the company.

In the 1980’s, General Electric, under the direction of Jack Welch, instituted a forced ranking program, which was quickly adopted by many other American companies. Under the system, managers graded all their employees against one another and ranked them on a scale of 1 to 5. Managers were forced to rank a percentage of them at the bottom and these under-performers were “encouraged” to ultimately find employment elsewhere. Welch championed this system believing it was only fair to let all employees know how they were truly performing. Thankfully this “rank and yank” system is being abandoned. GE dropped it after Welch retired and Microsoft just announced they would be doing the same.

Ranking has merit. Adding rigor to your appraisal program is a good thing. But systems that pit employees against each other and force supervisors to artificially rank employees high and low to fit the curve do not work. Your goal should not be to discard employees. You want a system that is outcome based; that sets realistic performance expectations that stretch employees; and that is focused on growing your talent.

Yes, performance must always be addressed and if employees cannot or will not improve, then they must go. But the goal of the performance management systems I’ve developed for my clients was not focused on forced ranking but on creating a team of top tier, high performing employees.

Call me  (207-967-0837 or to learn more about developing an effective performance management program for your organization.

If this post was helpful, you may also want to read:

  1. Take the Dread out of Performance Management
  2. How to do Quality Manager Evaluations
  3. CEO & Boards of Directors: Forging an Effective Relationship



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Filed under careers, Management

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