14 ms·

The stack ranking system is really known as the "GE Way" and is one of the reasons Jack Welsh is famous and made a ton of money selling management books. IBM a

by edster 14y ago

The stack ranking system is really known as the "GE Way" and is one of the reasons Jack Welsh is famous and made a ton of money selling management books. IBM also employed the 20/70/10% concept to employee reviews in the 90s.

whyleyc 14y ago
From personal experience they still do to this day.
- SatvikBeri 14y ago
  GE or IBM?
  - campnic 14y ago
    I can confirm IBM uses an evaluation technique that is modeled off the stack technique. All employees have a band for their job. Rank employees by performance per band. Then assign raises/promos based on performance relative to band. I can assure you that this description of the system doesn't begin to describe the hilarity involved. Any system where you have people proud to be ignorant of what their subordinates doing then being tasked to do meaningful evaluations is nonsensical in my mind. I guess its a 'growing pain' ... like how a heart attack is a growing pain.
    - kamaal 14y ago
      I worked for a very large Mega Indian IT corp. Where many clueless folks got promoted en masse, in the 90's and early 2000's IT rush here. What I saw was 95% of the middle management layer was thick. Practically of no use, and acted nothing more than an inefficient communication buffer between higher management and devs. They treated developers like tissues, choking innovation at every level. To make it look as though programmers are useless bunch of lot, and whatever good is happening in the organization it was because of them. The qualification of most these managers at best described was 'can write emails'. Performance evaluation in such companies is a joke, Only managers pets get promoted. And company functions like gangs working for their survival rather than for the company.
    - SatvikBeri 14y ago
      Thanks!
jasomill 14y ago
Sure, but there seems to be a difference between divesting of a conglomerate's lowest performing business units, lavishing on the highest-performing ones, and putting the rest on notice, and applying a similar system to a small team. The latter reminds me less of Welch than of Glengarry Glen Ross: "First prize is a Cadillac Eldorado. Second prize is a set of steak knives. Third prize is you're fired." For anyone who hasn't seen the movie: it doesn't end well. With respect to employees, the point of a "forcing function" has less to do with motivation than with finding some way to make change possible in a crumbling organization of fiefdoms whose managers insist that, nevertheless, "all my children are above average." If I recall correctly, Welch even points out that "C" players often go on to be "B" or even "A" players in other organizations, which doesn't change the fact that everyone can't be doing everything right when the overall organization is underperforming, so there are either weak spots, or no alternatives to immediate liquidation. Finally, I'm quite confident Welch would agree that "blindly applying a vague principle you read in some book, then sticking with it for years because 'it worked for $MEGACORP'" is a stupid idea, regardless of who wrote the damn book!
- SatvikBeri 14y ago
  Yeah-if I recall correctly, Welch's point was not that the system was perfect, but that it was a massive improvement over what they had. It's worth noting that Welch himself almost got fired from GE early in his career-so he knows that performance evaluations aren't 100 just!
- kamaal 14y ago
  As per Welch, stack ranking works because managers are themselves stack ranked. All the way up to the CEO. Therefore if a manager plays politics and promotes his inefficient pets, sooner or later he comes ranked last among his peers. So if though he wants, he can't. He also says that the stack ranking system makes it very difficult for the managers in the 3-4 year after it was implemented, because now they may have to let go some good people to retain the very best. However it did work to a large extent in GE. Jack Welch's immediate reportees all went on to become CEO's of top companies. But things like this blind copied and applied don't fly much. You need to implement them in spirit and that's difficult.
mrvir 14y ago
Remember reading that Enron was also one sad example of stack ranking system.
specialist 14y ago
Thanks for the cite. I couldn't imagine anything worse that the Stalinistic "360 degree" reviews I've experienced. I was wrong.

by edster 14y ago

whyleyc 14y ago

From personal experience they still do to this day.

SatvikBeri 14y ago
GE or IBM?
- campnic 14y ago
  I can confirm IBM uses an evaluation technique that is modeled off the stack technique. All employees have a band for their job. Rank employees by performance per band. Then assign raises/promos based on performance relative to band. I can assure you that this description of the system doesn't begin to describe the hilarity involved. Any system where you have people proud to be ignorant of what their subordinates doing then being tasked to do meaningful evaluations is nonsensical in my mind. I guess its a 'growing pain' ... like how a heart attack is a growing pain.
  - kamaal 14y ago
    I worked for a very large Mega Indian IT corp. Where many clueless folks got promoted en masse, in the 90's and early 2000's IT rush here. What I saw was 95% of the middle management layer was thick. Practically of no use, and acted nothing more than an inefficient communication buffer between higher management and devs. They treated developers like tissues, choking innovation at every level. To make it look as though programmers are useless bunch of lot, and whatever good is happening in the organization it was because of them. The qualification of most these managers at best described was 'can write emails'. Performance evaluation in such companies is a joke, Only managers pets get promoted. And company functions like gangs working for their survival rather than for the company.
  - SatvikBeri 14y ago
    Thanks!

jasomill 14y ago

Sure, but there seems to be a difference between divesting of a conglomerate's lowest performing business units, lavishing on the highest-performing ones, and putting the rest on notice, and applying a similar system to a small team. The latter reminds me less of Welch than of Glengarry Glen Ross: "First prize is a Cadillac Eldorado. Second prize is a set of steak knives. Third prize is you're fired." For anyone who hasn't seen the movie: it doesn't end well. With respect to employees, the point of a "forcing function" has less to do with motivation than with finding some way to make change possible in a crumbling organization of fiefdoms whose managers insist that, nevertheless, "all my children are above average." If I recall correctly, Welch even points out that "C" players often go on to be "B" or even "A" players in other organizations, which doesn't change the fact that everyone can't be doing everything right when the overall organization is underperforming, so there are either weak spots, or no alternatives to immediate liquidation. Finally, I'm quite confident Welch would agree that "blindly applying a vague principle you read in some book, then sticking with it for years because 'it worked for $MEGACORP'" is a stupid idea, regardless of who wrote the damn book!

SatvikBeri 14y ago
Yeah-if I recall correctly, Welch's point was not that the system was perfect, but that it was a massive improvement over what they had. It's worth noting that Welch himself almost got fired from GE early in his career-so he knows that performance evaluations aren't 100 just!
kamaal 14y ago
As per Welch, stack ranking works because managers are themselves stack ranked. All the way up to the CEO. Therefore if a manager plays politics and promotes his inefficient pets, sooner or later he comes ranked last among his peers. So if though he wants, he can't. He also says that the stack ranking system makes it very difficult for the managers in the 3-4 year after it was implemented, because now they may have to let go some good people to retain the very best. However it did work to a large extent in GE. Jack Welch's immediate reportees all went on to become CEO's of top companies. But things like this blind copied and applied don't fly much. You need to implement them in spirit and that's difficult.

mrvir 14y ago

Remember reading that Enron was also one sad example of stack ranking system.

specialist 14y ago

Thanks for the cite. I couldn't imagine anything worse that the Stalinistic "360 degree" reviews I've experienced. I was wrong.