Ways to Screw up Your Organization - Rank Employees

by Don Harkey

On our continuing series on how to really screw up an organization, we will now discuss the practice of ranking employees. Again, I want to stress to the reader, this is another way to MESS UP your organization.

Jack Welsh is considered by many to be a legendary CEO. Having lead GE for many years, Jack's philosophy earned him the nickname "Neutron Jack". By the turn of the century, he was considered by many to be one of the greatest CEO's of all time. (Jack's stock has dropped considerably since)

One of Jack's philosophies is to be #1 or #2 in your market or get out of the market. He applied this base philosophy to employees. Jack new that some of his employees were more effective than others. He thought about how to rank those employees. Sure, it is hard to distinguish between employee #20,568 and #20,569, but you sure can put employees into broad classifications. So GE set out to identify the top 10% of employees and the bottom 10% of employees. The top 10% earned promotions or bonuses. The bottom 10% were put on corrective action and often fired.

The idea is that if you clean out the "bottom feeders" every year, you improve the organization for everyone. As an employee, have you ever worked with that one person who doesn't carry their own weight? Frustrating, isn't it. Well, Neutron Jack had the answer and many companies jumped on it.

So how does one accomplish identifying the top and bottom 10% of employees within an organization. If your company is small, it is relatively easy. If you have 10 employees, promote one of them and fire another! Easy! The other 9 employees will thank you (although they will be watching with great interest as you hire a replacement for ole' #10 to see if they might be better then they are, lest they end up in the bottom spot the next year). It really keeps your employees on their toes.

If you are in a bigger organization, you will have to use the bell curve. Each supervisor will need to pick their top and bottom people. The supervisors will then need to get together and share stories about how great or terrible their people are. The larger the company, the longer this process will take, but it is worth it. If you are stuck in a stalemate in the meeting, make sure to barter with each other. "If you put Marsha on the top list, I will put Pete on the bottom". It is a common phenomena in these meetings that supervisors will want to promote all of their people and not fire any of them. Don't let them get away with that!

You might be thinking about the accuracy of the employee ranking system. How do you know you are truly getting rid of the "worst" employees and rewarding the "best" employees? The best advice I can give is to not worry about it. If a person ends up in the bottom 10% who should have been ranked in the bottom 30%, is it really such a terrible loss?

What about variation in employees between supervisors? Could their be bad managers whose employee's are less motivated than others? Nope. People are completely self motivated. A "go-getter" would fight through bad management and rise to the top (and "fighting through" management would surely make a good impression on their supervisor during the ranking process!).

I know what you're thinking... doesn't this discourage teamwork amongst your employees. I point you to the show Survivor. Those people compete with each other every day and it surely brings out the best in them! Right?!?

The lessons learned here are simple. Cut out your weakest employees regularly. Instill fear to the masses and ignore management's impact on their employees. Convert your entire HR system in a series of meetings with backroom bargaining and people trading. All of these things will come together to ensure bad management, employee competition, and most of all, fear within the organization. Oh... and your supervisors will HATE it! What a great way to destroy an organization from within!

THANKS JACK!