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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Amazon’s Social Rift: Ongoing Rank and Yank and Work / Life Non-Balance, NYT Video

Amazon’s Social Rift: Ongoing Rank and Yank and Work / Life Non-Balance, NYT Video | Talent and Performance Development | Scoop.it
The recent New York Times article about Amazon inspired an unprecedented online conversation about workplace stress.


This video features highlights of the thousands of comments posted on the web.


_____________________________
   
...[Amazon seeks]  to manage out a certain percentage of its work force annually. The number varies from year to year.


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From another New York Time article dated August 17th, 2015, is error about Amazon's performance culture:


An article by Amazon engineer, Nick Ciubotariu, was circulated by Amazon’s public relations department after The Times article was published. Mr. Ciubotariu describes strengths of the workplace, including focus on customers and innovation. He also wrote that “no one” was encouraged to “toil long and late,” and dismissed the concerns expressed by many women at the company, which does not include any women on its top leadership team.

    

His points contradicted the accounts of many former and current colleagues, and some of his assertions were incorrect, including a statement that the company does not cull employees on an annual basis. An Amazon spokesman previously confirmed that the company sought to manage out a certain percentage of its work force annually. The number varies from year to year.

 


Related culture & performance posts by Deb:

      

   
   
   



Photo credit:  Soumit Nandi Flickr Creative Commons

Deb Nystrom, REVELN's insight:

This brief 30 second video (click on the title or photo or link) is definitely worth a look on what a very large, 21st century profit and high growth minded company with a competitive culture looks like.  Amazon also features a traditional, 20th century, performance "rank and yank" evaluation system. It is more euphemistically called the Vitality Curve, or as stated above, managing out a certain percentage of its work force annually.  

Rank and yank can be a welcome temporary purge to a company that struggling.  Organizations that are stuck in the past, burdened with lower performance staff, or other low performance ills have had some success with the "Vitality Curve. Yet for the company to use it consistently, rather than temporarily speaks volumes on what is important and not important at Amazon.  ~ Deb

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Deb Nystrom, REVELN's curator insight, August 19, 2015 1:08 PM

This brief 30 second video is definitely worth a look on what a very large, 21st century profit and high growth minded company with a competitive culture looks like.  Amazon also features a traditional, 20th century, performance "rank and yank" evaluation system. It is more euphemistically called the Vitality Curve, or as stated above, managing out a certain percentage of its work force annually.  

While "rank and yank" can be a welcome temporary purge to a company that is stuck, burdened with lower performance staff, and so forth, to use it consistently, rather than temporarily speaks volumes on what is important and not important at Amazon.  


Also posted in Talent and Performance Development.  ~ Deb

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Adobe’s New Approach to Abolishing the Yearly Performance Appraisal: The Details

Adobe’s New Approach to Abolishing the Yearly Performance Appraisal: The Details | Talent and Performance Development | Scoop.it

Adobe is blazing a trail.  Rosemary Arriada-Keiper, Head of Rewards at Adobe reviews several of the compensation details of their new program.


1)  Has Adobe completely done away with performance appraisals (evaluating past performance)?

Rosemary: Yes, we no longer have performance appraisals.  While we still believe we need to evaluate performance, we believe this should be done on an on-going basis through regular feedback provided during “check-ins”.  These are on-going discussions between employees and managers about goals, status against them, what is working, what is not, whether goals need to be modified or reprioritized given the environment, etc.   ...These “check-ins” are not written. ...We encourage at a minimum that "check-ins" happen quarterly but we typically see monthly in practice.


2) Has Adobe completely stopped giving performance ratings?
 

Rosemary:  Correct, we no longer provide a rating.  ... because of  “check-ins” both managers and employees should have a very good sense of performance by the time managers need to make compensation recommendations.

4)   You mention there are rewards for key talent.  How are key/high performers selected...? 


Rosemary:  We have a separate process for that whereby discussions about key talent happen with leadership in the respective organizations.  We do identify who they are and they are “tagged” in the system as Key Talent (yes/no) but no rating per se. 

Key talent receives stock although occasionally they get cash.  Both managers and individual contributors are eligible.  The total pool is no more than 2% of the employee population.
 

5)  What has been the response from both managers and employees about this change in program?

 

Rosemary: Very positive. There’s lots of relief around not having to write annual performance reviews and label employees a certain way.  That said, the conversations managers have with their employee has had to shift from “these are the guidelines given to me by HR [to} push[ing}  managers to own their decisions and be able to articulate them (and defend if challenged). 


Related tools & posts by Deb:

      

  • Stay in touch with Best of the Best news, taken from Deb's  NINE multi-gold award winning curation streamsfrom @Deb Nystrom, REVELN delivered once a month via email, available for free here, via REVELN Tools.

         

              


Deb Nystrom, REVELN's insight:

Adobe made a huge jump away from their reviled stack ranking system, a move that even raised their stock prices.  

These are four (4) highlights from a longer article by Compensation Café shows how the revamped review, now called "check-in" without documentation, and the compensation system is now handled at Adobe.   Gone are the rankings, the yearly appraisal and ratings.

According to the head of "Rewards" at Adobe, it's been received quite positively.   It's certainly a step in the right direction.  It isn't really all that new.  The APOP or "Annual Piece of Paper" process described by an article in Fast Company in 1998 is very similar.  Here's the link.   I'll have more to say about it in my next blog post on REVELN.com.

~  Deb

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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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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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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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