Stack Ranking in Pharma: Bad Idea

Steve Ballmer's departure from Microsoft, snidely remarked on here, has prompted any number of "What went wrong?" pieces to appear. One of the key documents, though, is from last year: Kurt Eichenwald's writeup in Vanity Fair. The editorial staff has helpfully illustrated it with a photo of Ballmer himself that's so characteristic of his style that it's liable to give ex-Microsofters the shivering flashbacks. One of the common themes to all these articles is the company's use of "stack ranking", where you evaluate your direct reports and rank them top to bottom. The bottom performers get hammered, no matter how they might have done on some hypothetical absolute scale. If you happen to have a great group of high-performing people working for you - too bad. Some of them are going to be ranked at the imaginary bottom, and get punished for it. Here's Eichenwald: At the center of the cultural problems was a management system called “stack ranking.” Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees. The system—also referred to as “the performance model,” “the bell curve,” or just “the employee review”—has, with certain variations over the years, worked like this: every unit was forced to declare a certain percentage of employees as top performers, then good performers, then average, then below average, then poor. ...
Source: In the Pipeline - Category: Chemists Tags: Business and Markets Source Type: blogs