Well, if Silicon Valley is doing it, it must be genius! In her effort to motivate the troops, Yahoo CEO Marissa Mayer has returned to an oldie in the annals of performance reviews: Ranking employees on a curve.
First reported by Kara Swisher at AllThingsD, Yahoo's evaluation system sets the following parameters for employee grades:
- 10 percent employees to get grade of "Greatly Exceeds."
- 25 percent "Exceeds."
- 50 percent "Achieves."
- 10 percent "Occasionally Misses."
- 5 percent "Misses."
It's like reliving the first year of law school or business school all over again. How invigorating is that?
Ironically, just as news came out about Yahoo's grading system, Microsoft Corporation announced that it's trashing its own curve system. Generally, management experts applauded Microsoft's announcement. Writes Martin Buckingham in the Harvard Business Review blog:
And not just big news, but welcome news for anyone who has ever struggled to keep a straight face while telling a direct report that a “3” really isn’t that bad, that it truly does mean “meets expectations,” and that, hey, 60 percent of the company gets that rating, so don’t be too down on yourself.
Hey, that only 50 or 60 percent of employees will get the stamp of mediocrity doesn't seem too extreme to me. At my company, for instance, 80 percent or more must be rated 3.5 or below (only 5 percent of employees can get the top rating of "5"). Needless to say, those of us who aren't making widgets find all this a bit baffling.
But enough about me. What about lawyers? Arguably, in professions where there's little room at the top, a tough curve might be what's needed to drive home the message that partnership is reserved for superachievers. That said, giving people who've been working their buns off a "C" won't stimulate morale—much less performance.
These days, grading on a curve is falling out of style. It's regarded as a relic of a time when boxy suits with big shoulders were in vogue. Reports BloombergBusinessweek:
Forcing managers to rank their employees along a bell curve was popularized in the 1980s (thanks, Jack Welch), but lately it has fallen out of favor. The Institute of Corporate Productivity says the number of companies using either a forced ranking system or some softer facsimile is down significantly. . . Just over 5 percent of high-performing companies used a forced ranking system in 2011, down from almost 20 percent two years earlier.
So why do some employers persist in using curves? "The continued appeal is largely that rankings appear to take the 'human' out of human resources," reports Bloomberg.
The conceit, I guess, is that performance reviews have an objective basis. Yeah, like anyone believes that.
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