How managers assess the performance of their workforce can have a major impact on morale within a company, the image the company projects to the public, and its brand value.
The controversial practice of “stack ranking,” made popular in the corporate world during Jack Welch’s reign at General Electric, was once considered an effective way to measure employee performance. Employees were bucketed into categories ranging from top performers to underperformers. Statistically, it may have made sense to the front office, but many companies discovered that this practice actually led to unhealthy competition among employees, distracting and damaging conflicts among managers, and low morale.
This week, Microsoft became the latest major corporation to dump stack ranking in favor of more qualitative employee evaluations. Their focus going forward will be to evaluate employee performance more frequently and keep employees engaged through consistent communication.
This approach reflects advice offered by Linda Dulye, president and founder of Dulye & Co., on effectively measuring employee data.
- Evaluate current employee engagement such as whether people are completing tasks on time.
- Examine the impact of this engagement on individual and team performance, taking into account employee knowledge and levels of interest.
- Measure outcomes like the impact of engagement on aspects of business performance.
This content is an excerpt from PR News’ Employee Communications Guidebook, Vol. 4.
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Hello Richard, thanks for the article.
I have read that GE fired the bottom 10% each year but that means they replaced half their employees every five years.
Whenever I hear that an employer fires the bottom 10% each year it tells me they are
making many hiring mistakes each year.
Some employers would be firing very good employees if they had to fire the bottom
10%.