TL;DR: He believes everyone performs on a single measurable dimension and teamwork is irrelevant. He thinks that forcing a ranking is the only way to get honest feedback from a manager, and believes that a contributor's manager is the one person suited to judge that contributor.
That's not actually a TL;DR, that's all he said in his "passionate" defense.
Agreed. It's stuff you made up. He didn't say everyone performs on a single measurable dimension, nor that teamwork is irrelevant (nor does stack ranking imply either of these).
He also didn't say that forced ranking is the only way to get honest feedback. He said it's the only way he knows of, which is a considerably different statement.
To be clear, I'm not defending stack ranking here. Muddying the facts with blatant mischaracterizations does not help the discussion, though.
At GE there was only one objective, and that was to force honesty
I thought the purpose was to fire thousands of GE employees? Most of the articles I've read on this make it should like whatever problems/frustration it caused at Microsoft stemmed from the fact they were using stack rank without the goal of reducing headcount across the board.
But I have heard elsewhere that a big reason behind doing this is it forces managers to not be wishy washy telling everyone how great they are. It's very hard to enforce the discipline of tough conversations in organizations where there are long lines of people waiting to be promoted. GE is a prime example of this. People aren't there to invent great technology, or make a financial killing. Therefore the senior engineer doesn't have status. It's the senior manager that does.
I thought the goal was not to fire employees, but instead to identify and address the situation.
I have often been told that the goal of Welch's management style is to identify the top 10% and reward them heavily, and to identify the bottom 10% and find out how to help them improve.
Well, it's more of an impression than an informed opinion, but if you're interested use your favorite search engine with, say, Nielsen india outsourcing to start with.
I should also emphasize from hard, personal experience that how "hot" the area(s) a company is working in is pretty much orthogonal to whether you really want to work for them. Especially a company with such an established brand name and cash cows, which can allow a whole lot of awfulness without killing the company, at least for a while.
I mean, for about half their IT staff it was a terrible place to be in 2007-8 when they were laid off, but not before training their non-resident Indian replacements. Or to put it another way, IT isn't a respected part of the company, obviously viewed as a cost center. Really try to avoid those sorts of outfits if you can afford it.
And their CEO loves stack ranking ... surely that's enough to cool enthusiasm prior to carefully examining the company (e.g. check out the Ask The Headhunter approach).
I guess I don't understand something. Everywhere I have worked has had a ranking of employees such that when finances become difficult they knew who they would make redundant first. To me this is also stacked ranking.
The problem with some implementations is that it awards people for individual contributions and only if you are above average. This drives people to avoid contributions to a team so they can focus on their own personal contribution and to not want to help colleagues because that would drive the mean up eroding the value of personal contributions.
Couldnt you have stacked ranking with a criteria that rewards all involved for collaboration?
I guess I don't understand something. Everywhere I have worked has had a ranking of employees such that when finances become difficult they knew who they would make redundant first. To me this is also stacked ranking.
This is a stacked rating.
Couldnt you have stacked ranking with a criteria that rewards all involved for collaboration?
Yes, though it's tougher to measure. People generally know who the best mentors are, and who they can call when they need help with a tough problem. They also know the worst mentors, and the people who don't return calls. It's very hard measuring the people in the middle.
The biggest problem with stack ranking, as I have read about it being practiced, is that it is implemented on a team-by-team basis rather than across an entire engineering department. The consequence is that differences in strength between teams are not taken into account -- the members of each team are ranked only relative to the other members of that team. This leads to people trying to game the system in various ways to make sure they're not seen as the weakest on their team.
Ranking all engineers in the department together would be more difficult. Managers have a hard enough time getting a read on the strength of their own people; getting them to agree on how their people rank against the other managers' people would take quite a bit of work, I imagine. But it would give a much better answer to the question of whom to let go first, and it wouldn't provide as much incentive to game the system.
And I agree with you that the ranking should explicitly emphasize how well each employee works with their teammates.
What he's saying is that he's willing to have crappy managers around who are unable to give honest feedback. Rather than improving management, just use some mechanical system to "force" them to make choices.
Good people will "choose" to see work elsewhere.
In case this isn't clear to anyone, a manager could have a team of the 10 best people in the company, but given forced stacking and how teams are set, 1 of those people would be a candidate for termination in layoffs, even if there are 99 other people less capable and less critical to the company. No manager will be allowed to keep everyone -- they're all told to rank them and the decision to layoff the "bottom" 10% is done by HR.
14 comments
[ 3.2 ms ] story [ 46.8 ms ] threadThat's not actually a TL;DR, that's all he said in his "passionate" defense.
Agreed. It's stuff you made up. He didn't say everyone performs on a single measurable dimension, nor that teamwork is irrelevant (nor does stack ranking imply either of these).
He also didn't say that forced ranking is the only way to get honest feedback. He said it's the only way he knows of, which is a considerably different statement.
To be clear, I'm not defending stack ranking here. Muddying the facts with blatant mischaracterizations does not help the discussion, though.
I thought the purpose was to fire thousands of GE employees? Most of the articles I've read on this make it should like whatever problems/frustration it caused at Microsoft stemmed from the fact they were using stack rank without the goal of reducing headcount across the board.
But I have heard elsewhere that a big reason behind doing this is it forces managers to not be wishy washy telling everyone how great they are. It's very hard to enforce the discipline of tough conversations in organizations where there are long lines of people waiting to be promoted. GE is a prime example of this. People aren't there to invent great technology, or make a financial killing. Therefore the senior engineer doesn't have status. It's the senior manager that does.
I have often been told that the goal of Welch's management style is to identify the top 10% and reward them heavily, and to identify the bottom 10% and find out how to help them improve.
Honesty is necessary if that is true.
And their 2007 IT outsourcing deal is pretty infamous.
I never got the impression it was a company I'd want to work for.
They seem to be in a hot area now - consumer products data.
I should also emphasize from hard, personal experience that how "hot" the area(s) a company is working in is pretty much orthogonal to whether you really want to work for them. Especially a company with such an established brand name and cash cows, which can allow a whole lot of awfulness without killing the company, at least for a while.
I mean, for about half their IT staff it was a terrible place to be in 2007-8 when they were laid off, but not before training their non-resident Indian replacements. Or to put it another way, IT isn't a respected part of the company, obviously viewed as a cost center. Really try to avoid those sorts of outfits if you can afford it.
And their CEO loves stack ranking ... surely that's enough to cool enthusiasm prior to carefully examining the company (e.g. check out the Ask The Headhunter approach).
The problem with some implementations is that it awards people for individual contributions and only if you are above average. This drives people to avoid contributions to a team so they can focus on their own personal contribution and to not want to help colleagues because that would drive the mean up eroding the value of personal contributions.
Couldnt you have stacked ranking with a criteria that rewards all involved for collaboration?
This is a stacked rating.
Couldnt you have stacked ranking with a criteria that rewards all involved for collaboration?
Yes, though it's tougher to measure. People generally know who the best mentors are, and who they can call when they need help with a tough problem. They also know the worst mentors, and the people who don't return calls. It's very hard measuring the people in the middle.
Ranking all engineers in the department together would be more difficult. Managers have a hard enough time getting a read on the strength of their own people; getting them to agree on how their people rank against the other managers' people would take quite a bit of work, I imagine. But it would give a much better answer to the question of whom to let go first, and it wouldn't provide as much incentive to game the system.
And I agree with you that the ranking should explicitly emphasize how well each employee works with their teammates.
Good people will "choose" to see work elsewhere.
In case this isn't clear to anyone, a manager could have a team of the 10 best people in the company, but given forced stacking and how teams are set, 1 of those people would be a candidate for termination in layoffs, even if there are 99 other people less capable and less critical to the company. No manager will be allowed to keep everyone -- they're all told to rank them and the decision to layoff the "bottom" 10% is done by HR.