A method of evaluating employees, in which they are ranked against each other, is prompting lawsuits in the U.S.
Employees at Microsoft, Ford Motor and Conoco complain about systems that evaluate them on a bell curve, or rank people against other employees, from best to worst. They say the rating systems are discriminatory. White males tend to be favoured over blacks and women, younger managers over older ones, and immigrants over Americans.
The grading systems tend to help managers make clear distinctions between employees. Specifically, they single out the worst performers, who then may be let go. The systems are known as forced rankings, distributions or, in less flattering terms rank and yank.
The evaluations are usually done on managers and professionals, and with some lower-level employees. Grading is common at technology companies like Cisco Systems and Hewlett-Packard. But the concept is catching on with other firms as well.
Proponents of the system say that letting the bottom 10 per cent go each year raises the performance bar and increases the quality of leadership. Critics of the system call it a version of Survivor.
Even good workers can become part of the “bottom 10 per cent” if they are part of a very high-performing team. If they worked for a less successful team, they would likely land in the middle or top and be more immune to firing.
According to a class-action lawsuit filed against Microsoft late last year, employees are rated on a five-point scale, with only a certain percentage allowed to receive each score. Employees are given a ranking from most to least valuable. The employees charge that the ranking is largely subjective, based on a “lifeboat discussion” in which managers choose which employees they would want with them if stranded in a lifeboat.
Microsoft says the system is fair and accurate, because it gives the highest compensation to the top performers. They say employees can appeal their ranking. A spokesperson for the company says Microsoft has no formal ranking policy and that lifeboat discussions are used only as a tool to assist in evaluations.
Source: The New York Times, www.nytimes.com (search for article Companies Turn to Grades, and Employees Go to Court, by Reed Abelson.)
The grading systems tend to help managers make clear distinctions between employees. Specifically, they single out the worst performers, who then may be let go. The systems are known as forced rankings, distributions or, in less flattering terms rank and yank.
The evaluations are usually done on managers and professionals, and with some lower-level employees. Grading is common at technology companies like Cisco Systems and Hewlett-Packard. But the concept is catching on with other firms as well.
Proponents of the system say that letting the bottom 10 per cent go each year raises the performance bar and increases the quality of leadership. Critics of the system call it a version of Survivor.
Even good workers can become part of the “bottom 10 per cent” if they are part of a very high-performing team. If they worked for a less successful team, they would likely land in the middle or top and be more immune to firing.
According to a class-action lawsuit filed against Microsoft late last year, employees are rated on a five-point scale, with only a certain percentage allowed to receive each score. Employees are given a ranking from most to least valuable. The employees charge that the ranking is largely subjective, based on a “lifeboat discussion” in which managers choose which employees they would want with them if stranded in a lifeboat.
Microsoft says the system is fair and accurate, because it gives the highest compensation to the top performers. They say employees can appeal their ranking. A spokesperson for the company says Microsoft has no formal ranking policy and that lifeboat discussions are used only as a tool to assist in evaluations.
Source: The New York Times, www.nytimes.com (search for article Companies Turn to Grades, and Employees Go to Court, by Reed Abelson.)
