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Stack ranking fails - performance management revisited

Jon Reed Profile picture for user jreed August 28, 2014
Summary:
Last week, we revealed why HCM expert Chris Paine a short fuse with performance management. He isn't a fan of stack rankings either - here's why.

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Last week, we revealed why HCM expert Chris Paine has such a short fuse with performance management. Did I mention that he isn't a fan of stack rankings either? (I learned that first hand when Chris went off on a piece I wrote on Yahoo's stack ranking misadventures).

Paine's most recent performance management rants were inspired by a post from SAP's Steven Hunt. Hunt then responded to Paine via blog comment, so in part two of our interview, I wanted to know if Paine's views had been changed by reader reactions. Reminder that as per last week, the views Paine expresses here are his own and not necessarily those of his employer.

On the intensity of blog reactions

Jon: Are you surprised by the intensity of reaction when you rant on these themes?

Chris: A little. Perhaps people get slightly offended, I certainly haven't done any academic research to back up my opinions, so I'm challenging the accepted world view with what is really just conjecture and supposition. It's one of the reasons I make clear I'm ranting! However, I think there are many people who like me who have had experiences that leave them very cynical about the standardized performance management process.

If you've been through the process -and most of us have - you can't help but have an opinion on it. There are research pieces coming out now about the differences between intrinsic and extrinsic motivation, and I read these when I can. But I'm no academic, so I'm sure I get on the nerves of those who really study these things.

Jon: Have any of the reactions to your rants changed your views on performance management? If so, how?

Chris: Yes and no. In many cases, I've been forced to agree that performance management is a necessary evil. The example of managing unproductive workers is one example. I've also seen that there is a risk/reward payoff point where a systematized and standardized solution may be less risky than attempting to rely on the people management skills of so called 'managers'.

We have a horrible practice in business of promoting the most technically able people to be 'managers' where they have teams of people to manage, but we don't help those 'managers' learn any people management skills. Vijay Vijayasankar's blog posts have highlighted the need to ensure that in any solution where we hope to manage our people well, we need to start with figuring out how to help the managers.

Debating Steven Hunt's response

Jon: Your piece used an article by SAP's Steven Hunt as a starting off point. He has since responded in your blog comments, arguing that productivity needs to be measured to optimize revenue. Hunt also believes that a proper performance management system provides needed transparency into decisions on who gets promoted and why, etc. What is your reaction to Hunt's comments?

Chris: I was so happy to have Steven respond to my post. I will agree with Steven's comments about productivity. However, it's been my experience that a bad manager is far more influential on a team's performance than the individual excellence (or otherwise) of the team members. Performance ratings can be used as a reliable indicator of bad (and good) managers in an organization, but are not so reliable for individual employee comparison.

Indeed, a large part of any even slightly credible/fair performance review process should involve leveling rating across different teams because different managers will rate differently unless given 100% objective review criteria. At the team level however, a poorly performing team probably means a poorly performing manager. A poorly performing employee means that employee and their manager have issues and it could be on either side. So I'll agree, yes, systematized performance management processes  can help optimize performance, but at the manager level, not so much on the employee level.

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Jon: I thought Steven's point about performance management improving transparency was important.

Chris: One of the best things that a performance management process does is to clearly communicate to employees the behaviors, tasks and expectations of their role. I couldn't agree more that it is essential for an employee to understand the role that they are supposed to be filling. More confusion and unhappiness are caused by lack of understanding of the roles within an organization than almost any other point.

I would, however, hope that there are ways to do that which do not involve attempting to rate employees against those behaviors, tasks and expectations. I am going to have to think about this and whether I can effectively do this with my own employees.

Jon: Transparency is easy to say and much harder to do.

Chris: Absolutely -who isn't for transparency? I was recently told by a marketing guy that it was pointless having transparency as part of our company motto because every bugger out there claims to offer this. I certainly disagree this is the case in practice (I know that some companies are nowhere near as transparent as they claim to be - especially in HR processes), but everyone claims they are - right? Do systematized performance review processes add to transparency? Well, only in the case where the reviews are public, and I've only ever been at one company where that was the case.

You've may have read my pieces on how I think the hierarchical organizational structure that many of us work in today is an anachronism? That by better understanding who we work with and the roles/tasks we do within the company, a more dynamic structure becomes possible? I think that by combining that vision with a general improvement in online social interaction, it would be reasonably easy for anyone in an organization to understand why a person had been promoted, but that's a much more in depth piece that I probably need to flesh out.

I'd also like to point out, that it wasn't so much Steven's piece that kicked of the need to rant, as the tweet that promoted it. I'm not sure Steven really claims in his post that performance management processes are motivational.

Stack rankings - pure evil?

Jon:  You have a particularly issue with stack rankings and responded strongly to one of my posts on this topic. Why do you think stack rankings are ineffective and/or harmful?

Chris: I come back to my personal experience - it wasn't a motivator to perform, it was just a reason to start distrusting my co-workers.

Jon: As Vijay Vijaysankar put it - stack rankings will definitely motivate employees, but sometimes that motivation can be healthy. Agree?

Chris: If the motivation is to leave the company that is carrying out the stack rankings - agree 100%

Jon: Given the legal implications of promotions and terminations, what is your alternative when it comes to the right/legally compliant ways to motivate and evaluate employees?

Chris: Firstly, never terminate an employee unless you've completely CYA. Follow a well documented performance management process. Document what you do - never give an employee the least opportunity to accuse you of bullying behavior. Be rigorous in process. If you start a performance management process, be ready to see it through to the end, but also be very happy if you can bring the employee back around! Support, support , support!

If you cannot publicly justify the promotion of an employee, you can't justify promoting them. However, in my experience, promotion needs less legal justification. I can imagine situations where it may be required to show racial and gender bias have not played a part in promoting one person over another.

Jon: Nothing beats a long-simmering rant. Any other topics we can bring up besides the virtues of performance management that guarantee a Chris Paine rant?

Chris: Gender inequality, managing people vs being a 'manager', and destroying the environment for our short term political and financial gain whilst not caring about the long term that our kids will inherit.

Image credits: F Failing Grade Score Report Card Poor Performance Failure © iQoncept - Fotolia.com

The views expressed by Paine in this piece are his alone, and do not necessarily represent the views of his employer.

Disclosure: SAP is a diginomica premier partner as of this writing.

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