Employee Ranking Systems LO16673

Michael A. Gort (gort@mail.com)
Sun, 25 Jan 1998 12:38:03 -0500

Replying to Ben Compton LO16647

First, Ben, welcome back. I'm glad you reconsidered and look forward to
your membership in our community.

Ben wrote:

>The reason for ranking employees is to 1) determine the value of each
>employee, 2) create competition between employees. Both of these are
>critical to the long-term success of any business.
>If a business doesn't know who the most valuable employees are, how are
>they to reward people based on performance? And if employees aren't
>rewarded for their performance, then what are they rewarded for? Rewarding
>people based on subjective criteria increases the risk that a business
>will behave in unethical ways (I define unethical, in this context, as
>rewarding someone for something they have not done). Furthermore, if
>employees aren't ranked how are they to know if they need to improve their
>skills or increase their knowledge so they can become more valuable to the

Let me add an additional thought. Individuals are capable of different
levels of productivity, insight, creativity and innovation. If a company
truly values productivity, insight, creativity and innovation, then it
must find some way of ranking the members for compensation, promotion and
job assignment. For example, Bill gates has been quoted as saying that
the very best programmer can be far more productive than the mean. Maybe
as much as 100 times more productive. Further, the weakest programmers
will bring down the productivity of a team by more than they contribute.
Now, it seems that best practices would involve determing who are both
standouts and not satisfactory. Remove the unsatisfactory from a team,
and if appropriate, enroll them in remedial training programs. In the
meantime, the team should channel the most important, most interesting
features to the standout programmers.

While I believe a self-managed team can do this on their own, it is
doubtful that will be the initial state. Leadership will be required
initially from outside the team. Perhaps the goal should be self-managed
teams, but the need to rank productivity does not go away.

Ben wrote:
>As employees
>compete for the value they give their employer the business as a whole
>increases it's competitiveness. What better way to encourage learning than
>to have people compete with one another based on their knowledge and

I share Ben's fondness for competition, but today's complexity make
singular contribution unlikely. The software engineer must rely on the
support group to get her development environment just right. Rather than
writing all new functions, they will be reusing work of others. Software
QA requires cooperation to arrange inspections and walkthroughs. So in
the end, how do you rank the individual alone? Further, most projects
that require more than 2 programmers have a significant amount of
interdependence with other team members.

Personally, I tried to do this for several years while working as an
investment banker. Ultimately, we made force ranking a management team
consensus process. In other words, we were defining the value of our
staff by seeking a consensus from senior management. Full of
subjectivity, but the best we could devise.


"Michael A. Gort" <gort@mail.com>

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