Former Microsoft Employee and Behavior Expert Explains Why Stack Ranking is a Flawed and Damaging Review System

Matt Wallaert.
  • Matt Wallaert says there are technical reasons why battery grading is a faulty system.
  • He contends that even if all technical issues were resolved, it would still be a damaging review system.
  • The most annoying problem is that there are better alternatives for increasing individual and team performance.
  • See more stories on the Insider business page.

There is an old joke that my five year old son loves. Two hikers are walking when they pass a bear. Immediately, one of the hikers knelt down, tightened his laces and got ready to run. “Stop!” whispers the second hiker. “There’s no way you can run faster than this bear.”

“I don’t need to run faster than the bear” answers the first hiker. “I just have to run faster than you.”

The joke is ironically funny, but in the real world of a workplace, there is nothing worse than comparative versions of performance.

Every shred of scientific evidence we have supports stack ranking is a terrible idea and yet many workplaces continue to use it as their primary reward system.

For those lucky enough to have never encountered it, stacking is essentially the workplace version of Survivor.

When evaluating performance, team members are “stacked” against each other, much like a top ten list. The people in the first places are rewarded, and in the more extreme versions, the last ones are automatically fired.

There are technical reasons why battery grading is a faulty system.

For example, it is very imprecise: the person in first place and the person in last place may have very different performances or be separated by the smallest of the margins, but the ranking of the stack masks these differences.

It’s also arbitrary: the thresholds for rewards and punishments do not reflect objective measures, simply comparisons with the relative performance of others.

Finally, it’s usually very subjective: because performance is hard to capture in a single variable, the stinky ranking is based on opinions about who is better or worse, often across different types of jobs or projects.

But even if you could fix all the technical stinky ranking issues, it would still be a damaging review system.

When Google studied the performance of successful teams, by far the most predictive factor was psychological safety.

And the classification of batteries systematically destroys psychological safety.

When you look at the 7 item scale that Amy Edmondson used in the article where she introduced the term, each item can be seen as a rebuttal to the idea of ​​stinking ranking.

  • If I make a mistake in this team, it’s against me.
    • You can earn the stack leaderboard by celebrating your accomplishments. But you can also elevate yourself by denigrating others: you can be in the first place just by pushing others to the last place. Highlighting the failures of others is actively encouraged in comparative reward systems.
  • Members of this team are able to raise difficult issues and issues.
    • If you know that you are going to rank against others, then being vulnerable is highly deterred. This can cause team members to hide potential issues in a way that can be extremely costly to the business down the road. Just ask Enron, passionate about stacking.
  • Members of this team sometimes reject others because they are different.
    • In the stack ranking, every chance to reject others is a chance to elevate yourself, even if that rejection is not directly related to an actual performance issue. He puts the suffer overdue by comparison.
  • It’s safe to take a risk in this team.
    • Appropriate risk-taking is what enables business growth, creating extraordinary opportunities. But the smelly leaderboard perpetuates the status quo, as average performance within a group is immune to the penalties of being at the bottom of the stack.
  • It is difficult to ask for help from other members of this team.
    • This is perhaps the most devastating challenge for stacking: it strongly discourages collaboration. Not only do you get the traditional question of “Why would I help you when I could do my job?” But you get the bonus of “When you fail, I do better in comparison”. Two for one!
  • No one on this team would deliberately act in a way that undermines my efforts.
    • Unless, of course, if deliberately undermining their efforts means there’s an increased likelihood that they’re down … and you won’t.
  • By working with the members of this team, my unique skills and talents are valued and used.
    • Used, maybe, if it helps someone move up the ranks. But valued? Never! Valuing someone could push them up the stack, which means more competition for the top spots.

Reward systems are not easy and there can be good reasons for firing employees, especially when they negatively affect the entire team.

Acknowledging stack ranking issues is not an accusation of making compensation and employment decisions based on performance, but specifically on the method of pitting employees against each other and then making extreme decisions. based on the subjective result.

There are plenty of alternatives that increase individual and team performance, while protecting against the risks that typically lead to ranking in the stack.

For example, closely associating individual responsibility for goals with autonomy in how those goals are achieved typically produces strong results while increasing employee satisfaction.

By setting individual responsibilities, it’s easier to avoid social laziness because it’s clear where performance issues exist, one of the features traditionally seen as a stack ranking advantage.

And by coupling these responsibilities with autonomy, there is a more natural deterrent system: poor performance leads to loss of autonomy but with a clear return path that is supported by the reduced range.

The layering of accelerating rewards for collective performance encourages the psychological safety and resulting collaboration that stack ranking actively destroys.

While individuals are aware of their responsibilities, they are also aware of how these responsibilities fit together horizontally and vertically and are directly remunerated for contributing not only to broad goals that go beyond them, but also to empowering others. .

Imagine a team of recruiters. In the traditional stack ranking, those who recruit the most are rewarded while those who recruit the least are fired. This prompts a rush to hire the simplest (and usually the least diverse) hiring for straightforward positions, while letting difficult positions languish for months.

But with closely related responsibility and autonomy, individual recruiters can have different goals and be evaluated against them: someone can volunteer for a difficult assignment without fear of the performance of colleagues who take on easier tasks. .

And by adding a collective acceleration reward, such as “everyone gets a bonus if we are able to staff all of our positions within thirty days of opening the position”, there is an increased incentive for effort. collective.

Individual responsibility gives voice; collective rewards set the cap.

Personally, this is perhaps the most irritating issue with battery ranking: better alternatives exist.

In companies that continue to use it, executives are themselves the products of stacking.

And so they have a strong survival bias: because they only look at those who have reached the top (which happens to be them), they believe that the system works, because any system that would favor them is good because they are good .

It is not surprising that most companies that practice stacking are run by white males, because diversity has the same problem: If everyone who survived the ascension is white males, it reinforces the problem. idea that white men deserve to lead.

It’s a predictable, irrational belief that, given the abundant evidence against stacking, is just plain lazy.

And as remote working increases the options available to highly skilled workers, companies that continue to use it may find themselves at the bottom of the talent list, eaten by a bearish market (I told you I was a dad, so you should have seen this joke coming).

Matt Wallaert is the Executive Director of Behavioral Sciences at Frog, a global design and strategy consultancy.

Comments are closed.