Employee Ranking Systems LO16519

John Constantine (rainbird@trail.com)
Tue, 13 Jan 1998 07:09:31 -0700

Replying to LO16503 --

Roxanne Abbas, LO16503, asks if there might be something she missed in re
employee ranking systems. The short answer is no.

As has been pointed out by many others since the 1930's, and carried forth
in this list as well, there is no "scientific" justification for
believing that such systems are "true". And yet there is continual usage
of these systems and their progeny in business and education. Why is that?

Perhaps it falls back upon our personal experiences as people who like
some individuals around us and dislike others for all sorts of reasons.
While it might not be too important if we never intend to see some people
again, it is very important if we have to work with them, or expect them
to do work for us. Brushing all else aside, IMO this is the "bottom line",
usually disguised by all manner of so-called systems. In following this
line of thinking, it requires that we categorize people just as we
categorize other things. One small problem...we are not guaranteed to be
"right" in any way. So, those businesses and schools and other
organizations who don't get much information (or who are not interested in
the information, for their own reasons) create scenarios which may look
"right", but may have no validity at all, either scientifally, ethically
or legally.

Then why do they use them? Just as in other areas, the path of least
resistance is chosen. The path of least cost is chosen. If a person in the
organization with a specialty (law) happens to advise you that you need to
"worry" about the organization's risk position when someone is fired, you
will proceed to create protections against the potential financial loss.
Thus, the joy of policies and procedures and the creation of employee
handbooks, which control what can and can't be done in the organization,
what is allowed and not allowed by employees. And all this is based on
advice or existing mindsets, but may not have any foundation. If you don't
know better, what else might you expect?

Thus, the example of an organization consuming itself because it doesn't
know better is a common occurrence. Neglecting alternatives is a question
of dollars and cents, nothing more. What seems like the normal thing to
do is what is done by new companies or old, and the examples can be found
even on magazine racks which provide forms for performance appraisals,
"advice" for telling employees what to do and when, how to use report
forms for documenting when people are "late" or display some behavior
which in the eyes of management is undesirable.

I've not seen many handbooks which reflect accurately the reality of the
workplace, especially when things get tough. Management does what it feels
it needs to do, when and how it chooses, and insulates itself from danger
by ensuring that nothing is left to chance when the question of
performance comes up. This is especially so when it involves compensation
issues. Therefore, what we have in summary includes:

1. human nature acting out;
2. lack of information on the part of management;
3. reliance on advice which diverted the aims of management;
4. clinging to old paradigms (theory x management);
5. lack of cheap alternatives acceptable to managemnt;
6. fear-based behavior; and,
7. "everybody does it" attitude on the part of management.

So, what Roxanne points out is not unusual by any means; it is all too
common. IMO it falls back to "controlling costs", and "justifying
actions". In neither case does it reflect an inclination to see other,
more suitable, longer-term alternatives.

Every single thing pointed out by Roxanne is true regarding why such
"systems" are counter-productive, and why they should be avoided. Other
colleagues such as Fred Nickols have stated very clearly how much it costs
to carry on such systems. Writers such as Alfie Kohn reject such systems
and have written books giving logical reasons why. But they still persist.

I have written on this topic in this and other lists and forums. I have
found no justification for the use of these so-called systems, and in fact
I find them to be both abusive and in many cases illegal, depending on the
jurisdiction. While some have suggested that they can create a performance
appraisal system which coordinates with a compensation system based on the
principles of fairness and equity, I find no such evidence for that
belief, and I reject such claims outright.

The use of performance appraisal systems are unjust, unfair, abusive in
themselves, and in many cases illegal. The "real" costs are enormous, the
hidden costs even more so. How many have been impacted by ratings as
justification for promotions? How many have been impacted by ratings as
justification for raises and bonuses, not to mention commissions or
executive compensation of all kinds? Consider "what if" such methods were
NOT in use in those cases.

If one cannot separate the impact of the system as it relates to those
operating within the system, how can one decide if the teacher or the
student has more impact as it is reflected in "tests" in the system, or
testing for inclusion in colleges and universities et al? If the bell
curve merely defines the pattern of those within the system as reflected
on tests, is it reflective of the test itself, or those taking the test?
At the present time, Stanford, Princeton, Dartmouth and others are taking
action regarding the effects of "grade inflation". When is an A not an A?
How many schools use grades as a factor in admissions? How many companies
not only use such information, but DEMAND that the individual POSSESS such
grades in the forma of GPA's? When is an A really not an A? "If only the
real teacher had been in class that week...", "if only the student hadn't
been sick that week...", "if only the teacher knew more about the subject
matter...", and so on, and so on. Does the teacher get a raise based on
his/her "performance" as determined by testing of his/her students? Does
the school system get more funding based on "performance" of students
within the system? The questions are endless, but how many understand the
underlying factors?

In other areas, grading was found to be determined by activities outside
of school, such as selling booster club material. When this was discovered
by one school district, all sorts of people came out of the woodwork to
condemn the grading system, even though it has been a rather common
occurrence throughout the country for a long time. Labeling a student by
the amount of things sold is just one example of the disastrous effects of
any perfomance appraisal system, not just in the school.

Companies and school systems (as well as governments) should be much more
concerned than they are with the implications of potential lawsuits by
those impacted by such performance appraisal systems. If they cling to the
belief that their particular system is valid and based on "objective"
information, they risk MORE litigation, not less, because it is easily
shown that individuals falling within control limits are simply responding
within that system and DO NOT fall outside the system in either direction.
If they did, there might be something to talk about, but that is not what
the systems are based on, and the methodologies are groundless.

Add to this the "subjective" part of appraisal systems and you have the
stuff of litigation. "I was fired because the supervisor didn't like
me...", or "I didn't wear the "right" clothes, so I didn't get the

So why don't we see more examples of such litigation? One reason is simply
that employees are intimidated by the process, another is that the
employee may have experienced a termination or other disciplinary action
and may have to deal with other issues such as making a living elsewhere,
and may not have the time or money to pursue such litigation. But that
does not mean that the impact goes away; in fact, it lives on in the
individual long after the experience, and will affect his/her ability to
obtain future employment.

Finally, the employee may not be aware of the implications of the
appraisal process and its many flaws; both he/she and his attorney may be
completely in the dark and either choose other avenues or else choose to
do nothing at all.

It is sad to have any company go backwards, but not unexpected. They need
information they don't have, or have information they choose not to use.
They surely need help for the long-term, but are living in the past and
neglecting their own future survival, an all-too-common occurrence.
Roxanne is correct, and it is too bad. I think I'll avoid Sylvania.

Maybe a shareholder should demand an explanation?


John Constantine Rainbird Management Consulting PO Box 23554 Santa Fe, NM 87502-3554 Rainbird@Trail.Com http:\\www.trail.com\~rainbird

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