Yahoo’s Forced Rankings: Dig Deep and Evaluate Your Employees Properly

It’s the end of the year, when many companies start thinking about annual performance reviews. And, to go along with this, Marissa Mayer is in the news again because of a new Yahoo policy requiring employees to be rated on a bell curve. Bloomberg calls this “Yahoo’s Latest HR Disaster.”

Personally, I’d be curious to know how Bloomberg does employee reviews themselves, because the “forced ratings distribution” is not at all uncommon and there is a lot of logic to it. If you’re not familiar with it, here’s how it generally works.

To keep reading, click here: Yahoo’s Forced Rankings: Dig Deep and Evaluate Your Employees

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6 thoughts on “Yahoo’s Forced Rankings: Dig Deep and Evaluate Your Employees Properly

  1. The problem is the implementation. You need a good sample size (at least 30 people) for statistical stability. Having forced ranking in a group of 5 is ridiculous. We both know that a group that size could have 3 top performers. Is it fair that one of them gets “average”? Yet time and again I’ve seen HR people go for forced rankings in small groups.

    Or how about a company that just went through a huge downsizing? If the company went from 30,000 to 8,000 then you can bet that there will be few slackers in the remaining people. Yet HR tries to tell us that the lower 10% are losers – even though they were near the top quartile prior to the downsizing.

    I’ve seen both of these at my company, which may be why so many of the engineers treat HR with ridicule. A tool only works properly when used properly.

    1. Those are all huge problems and they are the result of really bad HR, which lots of companies seem to have. (They should hire me instead! Well, as a long distance consultant.)

      There should never be a forced distribution in a small department–that should be overall in a large group.

      And after a massive layoff–same thing. If you haven’t eliminated every poor performer after laying off half your workforce you stink at layoffs.

  2. For us it wasn’t the bell curve. Obviously that is a terrible way to rank people. Our company decided raises first then your manager had to make your evaluation match your raise. If one person got a big raise, there was less money for others. Some years there wasn’t much available for raises. So if this year you were getting a 2% raise then your manager had to give you a bad evaluation no matter how your work had been. If one person in a small department got a promotion everyone else got a bad review to even out the money.

    They should have just been honest with us.

  3. @EngineerGirl. From one engineer to another, my repeated experience is that when the HR folks try to use numerical methods to add structure to their tasks, or to plan, or to justify their actions, the result is often risible. I can provide examples, especially pertaining to managing the annual salary increase planning process. In addition, talking applied statistics to HR staff, or just about anybody, we might as well be speaking Ugric. In short, we agree.

    On two occasions while holding a general manager position, I was the interim HR manager while interviewing candidates for the position. I took the opportunity to emplace highly structured processes to simplify the work of the HR staff while giving it logical and mathematical coherence. The incoming HR manager then had tools that he or she could immediately use to good advantage, and did.

    One time while working overseas I had a chat with my Sr. VP. I said that I had a good idea for what my assignment could be after repatriating, but there would be one proviso – I couldn’t be fired for two years. That got his attention. I continued that I would apply my Lean Enterprise and expense reduction talents to HR. He laughed and said, “No deal!”

    On LinkedIn today, author and consultant Bernard Marr has an article about the need to abolish HR departments. His points are interesting to read, but in many cases I disagree. There continues to be a vital need for experienced and wise HR professionals and leaders, in my opinion.

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