Editing Vitality curve (section)

== Criticism ==

=== Morale ===

Stack ranking pits employees against their coworkers in what has been described as a [[Charles Darwin|Darwin]]ian "[[survival of the fittest]]", leading employees to "feel unmotivated and disengaged" as well as creating "unnecessary internal competition that can be destructive to synergy, creativity and innovation and pull focus from marketplace completion".<ref name="jue"/> Furthermore, people who belong to an exceptionally talented team may suffer attrition if they know a certain number of their team will be given lower grades than if they were part of a less talented team.<ref name="abelson"/>

=== Cost ===
According to [[CEB Inc.|CEB]], an average manager spends more than 200 hours a year on activities related to performance reviews, including training and filling out and delivering evaluations. Adding in the cost of the performance-management technology itself, CEB estimated that a company of about 10,000 employees spends roughly $35 million a year on reviews.<ref name=move/> Additionally, jettisoned employees provide the competition with fresh talent.<ref name="jue">{{cite news|last1=Jue|first1=Nicole|title=Four Major Flaws of Force Ranking|url=https://www.i4cp.com/productivity-blog/2012/07/16/four-major-flaws-of-force-ranking|access-date=14 February 2018|work=I4CP Productivity Blog|date=16 July 2012}}</ref>

=== Discrimination ===

Forced ranking systems may lead to biased decision-making and discrimination. Employees at [[Microsoft]], [[Ford Motor Company|Ford]], and [[Conoco]] have filed lawsuits against their employers, saying that forced ranking systems are inherently unfair "because they favor some groups of employees over others: white males over blacks and women, younger managers over older ones and foreign citizens over Americans".<ref name="abelson"/> For example, around 2001, Ford used a forced ranking system with three grades, A, B, and C, with quotas preset to 10%, 80%, and 10%. After a [[class action]] lawsuit, which it settled for $10.5 million, it stopped using the system.<ref name="ford"/><ref name="Mello2014">{{cite book|author=Jeffrey Mello|title=Strategic Human Resource Management|url=https://books.google.com/books?id=iOLKAgAAQBAJ&pg=PA447|year=2014|publisher=Cengage Learning|isbn=978-1-285-96978-7|page=447}}</ref>

=== Lack of empirical evidence ===
[[Rob Enderle]] has argued that "No sane person could sustain the argument for forced ranking once it's applied to products instead of people. Apply it to automobiles and make 20 percent or even 10 percent of any run unsatisfactory by policy, regardless of actual quality, and you'd immediately see that you were institutionalizing bad quality. With people, though, folks remain blind to the fact that forced ranking is walking example of [[confirmation bias]]."<ref>{{Cite web|url=https://www.cio.com/article/2394165/forced-rankings-are-institutionalized-stupidity-at-its-worst.html|title=Forced Rankings Are Institutionalized Stupidity at Its Worst|first=Rob|last=Enderle|date=July 13, 2012|website=CIO}}</ref>

[[Jeffrey Pfeffer]] and [[Robert I. Sutton]] have criticized the practice on the grounds that there is limited empirical evidence of its overall usefulness to organizations.<ref>{{Cite journal | doi = 10.1007/s10869-009-9093-5| title = Reactions to Different Types of Forced Distribution Performance Evaluation Systems| journal = Journal of Business and Psychology| volume = 24| pages = 77–91| year = 2009| last1 = Blume | first1 = B. D. | last2 = Baldwin | first2 = T. T. | last3 = Rubin | first3 = R. S. | s2cid = 49532179}} citing Pfeffer, J., & Sutton, R. I. (2006). Evidence-based management. Harvard Business Review, 84, 62–74.</ref>

=== Unrealistic assumptions ===
The model assumes that the players do not change their rating. In practice even the fear of being selected as a "C" player may result in an employee working harder, reducing the number of "C" players.

Some critics believe that the 20-70-10 model fails to reflect actual [[human behavior]].<ref>{{Cite web | last = Sedam | first = Scott | title = Rank and Yank: The curious legacy of Jack Welch | date = June 1, 2005 | url = http://www.housingzone.com/article/CA604367.html | access-date = 2009-09-09 }}</ref><ref>{{Cite web |last=Johnson |first=Gail |title=Forced Ranking: The Good, the Bad and the Ugly |date=May 1, 2004 |url=http://www.allbusiness.com/services/educational-services/4283505-1.html |access-date=2009-09-09 |url-status=dead |archive-url=https://web.archive.org/web/20070819023822/http://www.allbusiness.com/services/educational-services/4283505-1.html |archive-date=August 19, 2007 }}</ref> Among randomly selected people assigned to a task, such a model may be accurate. They contend, however, that at each iteration, the average quality of employees will increase, making for more "A" players and fewer "C" players. Eventually, the "C" players comprise less than 10% of the [[workforce]].

The style may make it more difficult for employees to cross rate from one division to another. For example, a "C" employee in a company's Customer Service division would be at a disadvantage applying for a job in Marketing, even though they may have talents consistent with an "A" rating in the other division.

=== Management philosophy ===
This is a [[competitive]] model of organization. The criticisms of both the [[moral]]ity and actual effectiveness of such a [[wikt:dog eat dog|dog-eat-dog]] method of social cohesion apply. Challenges to the model include: "C" player selection methods; the effect of [[office politics]] and lowered [[morale]] on productivity, communication, interoffice relations; and cheating. Rank-based performance evaluations (in education and employment) are said to foster cut-throat and unethical behavior.<ref>{{cite book | last = Callahan | first = David | title = The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead | publisher = Harvest Books | year = 2004 | pages = 384 | isbn = 0-15-603005-5 }}</ref> [[University of Virginia]] business professor Bruner wrote: "As [[Enron]] internally realized it was entering troubled times, rank-and-yank turned into a more political and [[cronyism|crony]]-based system".<ref>{{cite news | last = Streitfeld | first = David |author2=Romney, Lee | title = Enron's Run Tripped by Arrogance, Greed | work = [[Los Angeles Times]] | date = January 27, 2002 | url = https://www.latimes.com/archives/la-xpm-2002-jan-27-mn-25002-story.html | access-date = 2009-09-09}}</ref> Forced ranking systems are said to undermine employee morale by creating a [[zero-sum game]] that discourages [[cooperation]] and [[teamwork]].<ref>{{cite book|title=Organisational Behaviour: Global and Southern African Perspectives|year = 2009|url= https://books.google.com/books?id=9-jcsiS8RSoC&pg=PA462|publisher=Pearson South Africa|isbn=978-0-13-600717-3|pages=462}}</ref> They also tend to change [[norm of reciprocity|norms of reciprocity]] that characterise the interactions among employees. In terms of [[Adam Grant]]'s notion of [[Organizational culture#Adam Grant|"giver", "taker", and "matcher cultures"]], forced ranking systems are found to make it less likely for a "giver culture" to be present among employees, as individuals shift to "matcher" or "taker" behaviour.<ref name="grant-2013">{{cite web|author=Adam Grant|url=http://www.mckinsey.com/insights/organization/givers_take_all_the_hidden_dimension_of_corporate_culture|title=Givers take all: The hidden dimension of corporate culture|publisher=McKinsey|date=April 2013|access-date=2016-02-06}}</ref>

Rank and yank contrasts with the [[management philosophy|management philosophies]] of [[W. Edwards Deming]], whose broad influence in [[Japan]] has been credited with Japan's world leadership in many industries, particularly the [[automobile|automotive]] industry. "Evaluation by performance, merit rating, or annual review of performance" is listed among Deming's [[W. Edwards Deming#Seven Deadly Diseases|Seven Deadly Diseases]]. It may be said that rank-and-yank puts success or failure of the organization on the shoulders of the individual worker. Deming stresses the need to understand organizational performance as fundamentally a function of the corporate systems and processes created by management in which workers find themselves embedded. He sees so-called merit-based evaluation as misguided and destructive.

=== Specific examples ===
According to [[Qualtrics]] CEO Ryan Smith, stack-ranking and similar systems are suitable for ranking [[salesman|sales personnel]] among whom the management wishes to foster a spirit of [[Competition#Economics|competition]], but less suitable for [[engineer]]s, among whom management may want to encourage closer [[collaboration]].<ref name="abcnews.go.com">{{Cite web|url=https://abcnews.go.com/Business/microsoft-abolishes-stack-ranking-employees/story?id=20877556|title=Microsoft: 'Stack-Ranking' Gets Heave-Ho|website=ABC News}}</ref>

According to a 2006 MIT study cited by ''[[Bloomberg Businessweek]]'', forced ranking can be particularly detrimental for a company undergoing layoffs: “As the company shrinks, the rigid distribution of the bell curve forces managers to label a high performer as a mediocre. A high performer, unmotivated by such artificial demotion, behaves like a mediocre.”<ref>[https://web.archive.org/web/20131114053518/http://www.businessweek.com/articles/2013-11-13/microsoft-kills-its-hated-stack-rankings-dot-does-anyone-do-employee-reviews-right] citing http://web.mit.edu/chintanv/www/Publications/Chintan%20Vaishnav%20Punishing%20by%20Rewards%20for%20Publication%20Final.pdf</ref>

MIT Research Fellow Michael Schrage has argued that the forced ranking policy has perverse effects even in organizations that are successful: "Organizations intent on rigorous self-improvement and its measurement inevitably confront an evaluation paradox: The more successful they are in developing excellent employees, the more trivial and inconsequential the reasons become for rewarding one over the other. Perversely, truly effective objective employee-evaluation criteria ultimately lead to personnel decisions that are fundamentally rooted in arbitrary and subjective criteria. [...] The coup de grace occurs when the top employees are all told that
they must collaborate better with one another even as they compete in this rigged game of managerial [[musical chairs]]."<ref>[https://money.cnn.com/magazines/fortune/fortune_archive/2000/02/21/273841/index.htm archive.fortune.com] also quoted by Stewart, Gruys and Storm (2010)</ref>