Talent and Performance Development
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Talent and Performance Development
Making sense of performance and talent development systems to create & sustain high performance in organizations. For the BEST of the BEST curated news in performance, change, agile learning, innovation, motivation, social media and careers, SUBSCRIBE to Reveln.com/Tools/
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Scooped by Deb Nystrom, REVELN
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Amazon: Wrestling Big Ideas in a Bruising Workplace

Amazon: Wrestling Big Ideas in a Bruising Workplace | Talent and Performance Development | Scoop.it

Amazon may be singular ...[or] ...just been quicker in responding to changes that the rest of the work world is now experiencing: data that allows individual performance to be measured continuously, come-and-go relationships between employers and employees, and global competition in which empires rise and fall overnight. Amazon is in the vanguard of where technology wants to take the modern office: more nimble and more productive, but harsher and less forgiving.

... Keith Ketzle, a freckled Texan triathlete with an M.B.A., ...explain[s] how he left his old, lumbering company for a faster, grittier one.  “Conflict brings about innovation,” he said.

      

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To prod employees, Amazon has a powerful lever...Its perpetual flow of real-time, ultra-detailed metrics

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 ...the articles of faith ...describe the way Amazonians should act. In contrast to companies where declarations about their philosophy amount to vague platitudes, Amazon has rules that are part of its daily language and rituals, used in hiring, cited at meetings and quoted in food-truck lines at lunchtime. Some Amazonians say they teach them to their children.


...Employees are to exhibit “ownership” (No. 2), or mastery of every element of their businesses, and “dive deep,” (No. 12) or find the underlying ideas that can fix problems or identify new services before shoppers even ask for them.

    

Compensation is considered competitive — successful midlevel managers can collect the equivalent of an extra salary from grants of a stock that has increased more than tenfold since 2008. But workers are expected to embrace “frugality” (No. 9), from the bare-bones desks to the cellphones and travel expenses that they often pay themselves.  

   

To prod employees, Amazon has a powerful lever: more data than any retail operation in history. Its perpetual flow of real-time, ultradetailed metrics allows the company to measure nearly everything its customers do: what they put in their shopping carts, but do not buy; when readers reach the “abandon point” in a Kindle book; and what they will stream based on previous purchases. It can also tell when engineers are not building pages that load quickly enough, or when a vendor manager does not have enough gardening gloves in stock.
     

“Data creates a lot of clarity around decision-making,” said Sean Boyle, who runs the finance division of Amazon Web Services and was permitted by the company to speak. “Data is incredibly liberating.”


Deb Nystrom, REVELN's insight:

Are "rank and yank" evaluation methods and ultra-detailed metrics the future of work, a la Amazon, or Frederick Taylor's 20th century scientific management methods on steroids?  Time will tell.  I hope that other companies with a different work ethic will prevail. ~  Deb

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Four Major Flaws of Force Ranking - i4cp

Four Major Flaws of Force Ranking  - i4cp | Talent and Performance Development | Scoop.it
Forced Ranking or "The Vitality Curve" -  This isn't comparing apples to apples; it's like comparing apples to bacon.

The chart above are the results from a recent i4cp study on performance rankings, published in  Performance Management Playbook: Managing Critical Performance Challenges, showing a sharp decline in both forced rating and forced ranking since 2009.  

  • Two-thirds of companies that did utilize these practices abandoning them - from 49% in 2009 to 14% in 2011.
  
i4cp's list of shortcomings of force ranking includes:
 

Companies unwittingly give a huge boost to the competition.

..when Microsoft jettisons their presumed lower-performing employees, they are providing the competition with fresh talent

   

The bottom 10% isn't always the bottom 10%.

An employee who is in the bottom 10% in a high-performing department might rank much higher when compared to employees in a different department that has lower overall performance. Why should that employee be let go when he or she outperforms those in other fucntions? This isn't comparing apples to apples; it's like comparing apples to bacon.

   

Forced ranking can be an engagement and innovation killer.
    
Related posts by Deb:

     

   




Deb Nystrom, REVELN's insight:

Dick Grote is still touting forced rankings (in a modified way, but still rank & remove) in his articles and books on performance appraisal and performance management.  

The i4cp consulting group offers reasons why it's not working in 2012.  ~  D

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Accenture, Another Big Firm to get Rid of Annual Performance Reviews and Rankings

Accenture, Another Big Firm to get Rid of Annual Performance Reviews and Rankings | Talent and Performance Development | Scoop.it
As of September, one of the largest companies in the world will do all of its employees and managers an enormous favor: It will get rid of the annual performance review.

Accenture CEO Pierre Nanterme told The Washington Post that the professional services firm, which employs hundreds of thousands of workers in cities around the globe, has been quietly preparing for this “massive revolution” in its internal operations.

“Imagine, for a company of 330,000 people, changing the performance management process—it’s huge,” Nanterme said. “We’re going to get rid of probably 90 percent of what we did in the past.”

The firm will disband rankings and the once-a-year evaluation process starting in fiscal year 2016, which for Accenture begins this September. It will implement a more fluid system, in which employees receive timely feedback from their managers on an ongoing basis following assignments.

Accenture is joining a small but prominent list of major corporations that have had enough with the forced rankings, the time-consuming paperwork and the frustration engendered among managers and employees alike. Six percent of Fortune 500 companies have gotten rid of rankings, according to management research firm CEB.
Deb Nystrom, REVELN's insight:

WHOA, Accenture is STILL using RANKINGS?  It is little wonder, then, that they are jettisoning 90% of their current system.  Rankings were considered OLD school in the 80s, based on lessons learned of the demoralization and loss of mentors via GE's vitality curve, also known as rank and yank.


For context: GE and Jack Welch’s stack ranking policies, which focused on ranking employees and firing the lowest 10% of performers was credited, by proponents, with creating a 28-fold increase in earnings and a 5-fold increase in revenue at GE between 1981 and 2001. However, when other companies tried the same approach, it reportedly led to widespread dishonesty, mistrust, and productivity loss among workers.


A 2013 survey by WorldatWork, quotes the method is used by about 12% of US corporations, whereas the The Corporate Executive Board Company, it is used by 29% of companies.[

Rob Ender is quoted saying that downsides of stacked ranking, as one employee competes with aother, include how it disrupts collaboration and innovation as employees don't want somebody else to be successful. So it creates a culture of shutting down ideas.


Generally, ranking systems seem akin to 20th century practices based in to Frederik Taylor's scientific management.  His work was more suited to starting up the industrial age, than helping us move fully into the information age and specialization.  ~  Deb




 



That the firm "will implement a more fluid system, in which employees receive timely feedback from their managers on an ongoing basis following assignments" - seems like good old common sense. Of course, in follow-the-money hierarchies, common sense is not so common.

If any of your followers are interested in alternatives, here's the piece I wrote on it: http://reveln.com/6-steps-beyond-industrial-age-performance-appraisals/

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The Pros And Cons Of Forced Rankings: A Manager's Perspective

The Pros And Cons Of Forced Rankings: A Manager's Perspective | Talent and Performance Development | Scoop.it

...on Forbes.com there's been a spirited dialogue around the controversial management technique known as "stacking," or forced ranking. Here's one manager's reasoned, hands-on perspective."


An article in Vanity Fair by Kurt Eichenwald (“Microsoft’s Downfall: Inside The Executive E-mails and Cannibalistic Culture That Felled A Tech Giant”) triggered recent discussion.  Forbes subsequently featured posts including

 



These...touched a chord in the business community...generat[ing]  ...close to 400,000 readers and well over 300 reader comments. 


As a manager with MassMutual Financial Group (a well respected Fortune 500 company), I did see some benefits to forced ranking, though in the end I felt these benefits were outweighed by the managerial problems it caused. 


  • The system did force managers to have hard conversations with employees that they might otherwise have avoided.   ... In a forced ranking system, managers – and employees – have no place to hide.  It literally forces performance issues to be addressed; for an organization that wants to tighten or formalize its management processes, I believe the system can have benefits.

  • it caused employee morale problems.  While the system I managed in was intended to help promote closer linkage between job performance and bonus payouts –...it often felt like the cure was worth than the disease.   As a manager, the discussions I had over many years about the fairness of bonus payouts were not nearly as problematic as those I routinely came to have over end-of-year rankings.  






Deb Nystrom, REVELN's insight:

This perspective is similar to my own experience in the trenches working with managers and HR / OD clients updating or implementing their performance systems.  

The pros and cons are aptly described.  The size of an organization and it's cultural state determine what a forced ranking system will do, ultimately, to performance overall.  


A comment by Dick Grote, a performance management consultant and well-known author on the topic,  (pro-forced ranking with appropriate conditions) is this:  


  • "Forced ranking, used well, has the power to be the most beneficial management procedure an organization can adopt—for the company and its employees alike."


Forced Ranking or "Vitality Curve" systems may have power for a performance "clean-out."  However, what is the lasting nature of that power?  Is is enough to make a forced ranking system worth the Return on Investment (ROI) with the focus being only individuals?

Another point of view from a comment on this excerpted blog post is that,


  • "Team-oriented organizations provide more flexibility, consistency, and growth than organizations based on individual performance."


~ D

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