You want to destroy organizational excellence? Rank your people!


Whoever hit upon the idea to rank people within an organization based on ‘performance’, calculated by whatever method, deserves the Nobel Prize. Field?  ‘Destruction of all possibilities of ever achieving Organizational Excellence’

Heresy!! I hear, well, I know, but there we are (again.)

Ranking people within an organization based on ‘performance’ is problematic on so many levels that it is mind-boggling to think how it ever came into being.

But what is actually wrong with it?

Okay, let’s take it from the top.

Method.
Performance in people is seen as the achievement of goals, targets, KPIs – let’s ignore how these are set, because it really doesn’t matter.
In previous posts we already touched on this matter, performance has nothing to do with the achievement of indicators, no matter what you choose to call them. Performance in people even less so because people as individuals often have only very limited influence on the achievement of these indicators even if their achievement would indicate any measure of performance.
The actual achievement of most indicators is subject to team effort, external influences, internal circumstances outside scope of authority and plain manipulation of circumstance.
So the measurement of performance through indicators, even if we would take it as relevant, which it clearly is not, would be inherently unjust.
The achievement of indicators is often used to rank people in a bell curve into high, middle and low performers. This is adding insult to injury. If the measurement of indicator achievement really results in a bell curve, then all performance points under this bell curve are equal – see SPC theory if the concept is unclear – therewith the arbitrary cutting of this bell curve into quantiles or similar to represent differences in performance, is a) mathematically wrong, b) baseless, c) you would be messing with a stable process, and d) equal to deliberately destroying your employee base as once you’ve done it once and took action, you consequently could do this at infinitum until you have one employee left.

Let’s take stock, we have an evaluation method which is objectively unjust and mathematically wrong.
And we rank our people according to that method. That ranking often is not just for statistical or other noble purposes, but used as basis for decisions on the allocation of money, promotion and dismissal.
It becomes obvious that something here is not in the best interest of an organization in search of sustainable high performance.

Fundamental
Okay, so let’s assume for a moment, that we have found a just and accurate method to rank people based on their performance.
Then, this would be all right and desirable, wouldn’t it? Because I would want to divide my people into low, medium, and high performers.

Sorry, but what on Earth for?

Internal competition? The benefits of internal competition have been debunked long ago.
Internal competition serves no legitimate purpose and will destroy cooperation, teamwork, and operational excellence

Remuneration? We discussed it repeatedly, remove remuneration and remuneration decisions once and for all from performance measurement and management – these two don’t mix. If you are dead set and really want to destroy motivation, engagement, teamwork and cooperation, please, pay your alleged high performers more money, nothing will be more effective.

Promotion? Basing decisions about promotion on current performance is the basis of much evil.
Decisions on promotions should be based on capabilities, competencies, and desire, not employee ranking.

Motivation? This is a fundamental misconception. Even if this ranking is objectively just, which is almost if not completely impossible, it will always be perceived as unjust in one way or the other and therefore a ranking will achieve the opposite of motivation. The assessing manager/department will be viewed as unfair and colleagues will be perceived as a threat to one’s own wellbeing. Ranking employees against each other subsequently destroys not only motivation, it also destroys cooperation, teamwork, engagement and all chances to operational and organizational excellence this organization ever had.

Learning and Development? Ranking people against each other gives no legitimate or even useful information about L&D needs of anyone for anybody. L&D requirements are better and legitimately developed out of competency, capability and process management, and similar individual response loops as well as organizational learning requirements, not competitive rankings.

Dismissal Decisions? If you base dismissal decisions on quasi performance ranking, i.e. the lowest quantile will be slated for eventual dismissal, you will make yourself extremely vulnerable to industrial tribunals and lawsuits. Not a very clever thing to do.

Performance Management? Ranking people against each other gives no legitimate or even useful information for the management of performance. Performance management is better and legitimately based on competency, process management, and capability response loops, not competitive rankings.

So, there we are.

Ranking your people on performance serves no legitimate or useful purpose other than to destroy motivation, cooperation and teamwork and any chance of achieving sustainable high performance.

Above is naturally an outline limited by the nature of a post and we will be more than happy discuss further and encourage discussion on and offline.

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