Dick Grote: Rank and Yank, a.k.a. Differentiation, Used Ruthlessly and in Stealth at Vanguard

Microsoft. Yahoo. Amazon. General Electric. Enron. Federal Reserve Board. And, now Vanguard joins the list of companies using Dick Grote’s rank and yank performance management program to set targeted people up to fail and then blamed the target for the management-driven “failures.” The Philadelphia Inquirer, through its reporter, Erin E. Arvelund, (and the ex-employees who discussed their experiences) exposed Vanguard’s behavior.

With this blog’s coverage of Grote’s rank and yank, this manipulative management style was not new, but what did draw attention is Vanguard’s interest in covering up its use of rank and yank. When an organization decides to enforce rank and yank, that organization must reduce “management” to the calibration meeting’s ranking process. The managers no longer manage the business but instead spend time sorting out who is going to be placed in the firing-level rank during the calibration meeting.

[Author’s note: I was encouraged by the humanity of managers who stood up for their subordinates (and supported their legal claims) in the article. This action is rarely seen, and I do commend it.]

Rank and yank is a vicious process, practiced in secret with an informed management against under-informed labor (conned with the use of euphemisms and doublespeak). The targeted labor are treated as prey to be attacked and then fired in a way to convince the target and, perhaps, the courts and other applicable agencies, that the management-documented (and directed) failure is the target’s fault and that this forced fault deserves a punishment of penury. (The effect of rank and yank is depicted in the table, below)

Bucket (rank) Percentage [“vitality curve”] (amounts can be adjusted) Effect
A 20 Lavish rewards, encouragement
B 70 Little to paltry increase
C 10 Pressure to quit, firing

I think that it is the secrecy that fuels the use of rank and yank because the focus of the process is to relentlessly expect perfection and then expect the target to produce these impossible goals, fail, and then be fired for not being able to achieve the impossible. See Dick Grote’s article, “Performance Appraisal: Solving the Toughest Challenges.”

It is good for organizations who use rank and yank to be exposed, as its use is evidence of organizational systemic failure.

For further information, see www.vanguardlawsuits.com (author is Vanguard former employee, Leigh Ann Harris, who has filed a lawsuit against Vanguard (according to the article)).