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I recently saw an article on Fast Company talking about the concept of ranking, as in ranking employees. This is something that was made popular decades ago by Jack Welch, former CEO of GE. His thought was to rank everyone and then terminate the bottom 10%. Back then, several companies embrace the idea of ranking.
Thankfully over time, the concept of ranking fell out of favor. Which is why I can’t tell if the Fast Company article is intended to support ranking or just call attention to the fact that companies are doing it again. Either way, I wanted to talk today about why ranking isn’t a great idea.
Here are a couple of examples to illustrate. Hypothetical #1.
Let’s say we all work in the sales department. And the organization decides to rank all the sales managers. That means someone must be on the bottom of the list. Let’s say it’s me. So Sharlyn is the worst sales manager. According to Jack Welch, I should be fired.
But here’s the deal. I sold $10M last year. I had a $1M goal. So, I sold 10x my goal and I’m the worst and I’m gonna get fired. The problem here isn’t me or my sales. It’s the company’s goal setting process.
The same philosophy applies to candidates and the recruitment process. Hypothetical #2.
We’re hiring a new sales manager. All the interviews are done, and the recruiting team is getting together to discuss the final candidates. They decide to rank all the candidates. Again, that means that someone will end up on the bottom of the list.
Remember, the first goal of a job search is to get multiple job offers. Candidates want multiple offers to consider. Which means that companies should have the same goal – multiple qualified candidates. The challenge with ranking is that the last candidate on the list could be a highly qualified candidate. But they are last on the list. And how many managers are willing to say that they want to hire the last person on the list.
Ultimately, organizations should not be ranking employees. They should be comparing employee performance to the company standard (we discussed performance standards at length in our article on quiet quitting). If an employee’s performance doesn’t meet the standard, then that should be addressed. Keep in mind, my examples above only talked about the bottom of the ranking. What if the person at the top of the list doesn’t meet the company standard (i.e., the best salesperson doesn’t make goal)?
The same applies with candidates. In interviews, we should not be saying “Oh, this person is better / worse than the last person I spoke with.” Instead, we should be saying, “Wow! I have two great candidates. This is going to be a tough decision.” Or maybe we’re faced with “Y’know, neither candidate has the qualifications. I’m going to follow-up with HR to see what next steps are.”
Ranking candidates and employees is a form of bias called contrast bias. It’s when we’re comparing people to each other versus what we should be comparing them to – which is the company standard. There’s a reason that ranking fell out of favor decades ago. It doesn’t help organizations attract, engage, and retain the best talent. In fact, organizations could just be making talent decisions using the wrong information.
Image captured by Sharlyn Lauby while exploring the streets of San Diego, CA
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