Rank and Yank / Forced Distribution–Dick Grote: Giving Advice on Bad Reviews—Agree with Poor Rating

[Note:  This blog has covered Dick Grote’s wicked “rank and yank” program previously.]

Dick Grote has authored another article on “rank and yank,” “What to do when you think your performance review is wrong” (published in the Harvard Business Review (March 7, 2017)). This time the defense of the system is indirect—informing the recipient of a “C-Bucket” rating to accept it. Indeed, as Grote states in the article, nothing the employee argues against the rating is likely to change it.

Indeed that is true in the rank and yank process. The decision made in the calibration meeting for managers is final. Those in the C-Bucket receive negative ratings in order to convince them to quit.

Bucket (rank)

Percentage [“vitality curve”] (amounts can be adjusted)




Lavish rewards, encouragement



Little to paltry increase



Pressure to quit, firing

Because of the calibration meeting, where managers rank employees, changing a rating means changing it for others, given that rank and yank is a rigid, inhuman, and employee-abusive system.

Artist: Michael Sloan

A key Grote quote:

“But what if a company’s forced ranking procedure, honestly and objectively done, reveals that the blacks or women or disabled employees just aren’t as talented as the white ones? Should they do what some Harvard professors are said to do and award A’s to all the blacks, just to keep them from squawking?” (Grote, page 4 (a quote from a previous post). (Note: Consider this statement from Grote with the ever-present and persistent legacy of slavery and Jim Crow subjugation in the United States of America.)

Grote offers three options for an employee facing an unacceptable performance rating:

  • Accept the rating (Grote preferred).
  • Disagree with the rating (Grote disfavored this option because the manager is invested in the rating, errors look bad on the manager (rather interesting an aggrieved employee must defend unacceptable management behavior, while the employee is expected to satisfy any whim of the manager).
  • Quit (Grote advises for people who get c-bucket ratings to go on a “decision-making” leave to decide either to attempt to fulfill the impossible to meet expectations or quit. The resignation of the employee is the ultimate goal.)

While Grote thinks managers should be given absolute authority in performance appraisal, the personnel record is the property of the employee. The employee has the right to state what is allowed in that property; hence, the reason why employees must sign reviews. The company merely has possession of the employee’s property—the contents of the file.



Federal Reserve Board: Board Issued 2017 Office of Minority and Women Inclusion Report. Slightly More Clarifying Information Included; Potential Improvement Obscured by Lack of Explanation

In March 2017, the Federal Reserve Board (Board) posted the 2017 version of its Office of Minority and Women Inclusion (OMWI). As discussed previously in this blog, there had been some attention in inclusion issues by the Congress and the Board’s Office of Inspector General (IG). The blog had covered these developments, and also a former long-running case (not mentioned by the OMWI report), Artis v. Greenspan Bernanke Yellen.

Overall, with this report, the reader is made to feel skeptical of all Board activities, even if true progress is being made. More explanation of the programs being performed with the money of United States citizens, and the elimination of obscurity,  is expected and required.

Federal Reserve Board, Office of Minority and Women Inclusion,
Reports to Congress

(Preface language for report submitted in 2015.) “Pursuant to section 342(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Office of Diversity and Inclusion (ODI) of the Board of Governors of the Federal Reserve System must submit an annual report to the Congress outlining the activities, successes, and challenges of the office. This is the office’s report for calendar year 2014. Sheila Clark serves as the director of ODI.”

Year Link
2012 http://www.federalreserve.gov/publications/minority-women-inclusion/2012-omwi-preface.htm
2013 http://www.federalreserve.gov/publications/minority-women-inclusion/2013-omwi-preface.htm
2014 http://www.federalreserve.gov/publications/minority-women-inclusion/2014-omwi-preface.htm
2015 http://www.federalreserve.gov/publications/minority-women-inclusion/2015-omwi-preface.htm
2016 http://www.federalreserve.gov/publications/minority-women-inclusion/files/omwi-report-20160331.pdf
2017 https://www.federalreserve.gov/publications/files/omwi-report-20170331.pdf

Sheila Clark’s letter to the EEOC (printed in the Auerbach book, page 123).

In reading the 2017 OMWI report, the report has essentially the same content and structure as in 2016; however, there were some additions. The additions are concerning as they allow worrying questions about the Board’s seriousness to this important issue, given its history in this area.

  • The creation of a Diversity and Inclusion Strategic Plan. (The document seems like a condensed OMWI Report. The issue is the obscurity of Board actions, which is worrisome and makes an observer doubt the organization’s sincerity in improving its failings.)
  • Divisions provide the Board’s Office of Diversity and Inclusion with periodic reports through a Diversity and Inclusion Scorecard. (Again, a description of this scorecard is not in the report, leading to concern about sincerity.)
  • The positions filled in 2015 and 2016 evidence a somewhat similar rate of new hires, 17.1 percent and 16.2 percent, respectively. (See chart below.) The numbers suggest somewhat consistent turnover, leading to the possibility of the existence of a “rank-and-yank” system.
  • The addition of courses to its core professional development curriculum–
    • “Unconscious Bias”
    • “Generational Differences”
    • “Inclusive Leadership.”

(It is unclear whether these courses are merely offered or are required for employees to attend. And, what will be ODI’s oversight responsibility to make sure things stay on track or that the courses prove effective? Again, there is nothing mentioned in the report.)

  • In 2016, the Board created targeted strategies to address low participation of African Americans and Hispanics in research positions. (Unclear what these strategies are.)
  • In April 2016, there was a creation of a Diversity and Economic Inclusion Initiative and a creation of a workgroup, of which the OMWI Director is a member. (The report did not provide any description of these programs.)
Board Hiring and Promotions, 2015 and 2016
2015 2016
Positions filled 576 576
Interns 118 127
Positions filled w/ counting interns 458 449
Total number of Board employees 2673 2766
Percentage (new non-intern hires over total number of employees) 17.1% 16.2%

Given the issues presented by the IG previously and with the long running time of the now-ended Artis v. Greenspan Bernanke Yellen case, the Board’s activities with regard to diversity and inclusion continues to remain an issue of moderate to grave concern until demonstrable, sustained and consistent improvement is shown. Meetings, scorecards, and reports are a start, but insufficient compared to firm results.

In addition, the Board’s use of rank and yank undermines and destroys all efforts described in this post. The fourth full paragraph, left column on page 7 was used in previous years. [Note: The blog had identified that rank and yank is potentially being used at the Board.]

Artist: Michael Sloan

In all the tables in the “Equal Employment of Minorities and Women,” the delineation of non-minority and minority is obscure, specifically the minority category. Such obscurity can hide issues with specific subgroups under the umbrella of minority.


Harvard Business Review and Dick Grote: A Management Consultant that Loves the Process of Termination, Dehumanizing Human Employees; Review of Grote’s Article– “A Step-by-Step Guide to Firing Someone”

Grote, Dick (2016). “A Step-by-Step Guide to Firing Someone.” Harvard Business Review. February 17.

Artist: michael sloan

Harvard Business Review has published another article on mass termination, specifically this document of Dick Grote, “A Step-by-Step Guide to Firing Someone.”

The writing is not different from the theme of his writings: that organizations should rank employees into A, B, and C buckets and humiliate, dehumanize, and fire those placed in the C bucket (see Grote’s quote , below, for an example).



Percentage (amounts can be adjusted) Effect
A 20 Lavish rewards, encouragement
B 70 Little to paltry increase
C (aka slackers, slouches, losers, ne’er-do-wells) 10 Pressure to quit or firing

The report is like a recipe of planning destruction in an organized way (creating a transition plan; checking that the employee is not fired on a birthday, shortly before a pension is vested, and so on) making it seem normal, but the effect of the employee losing his or her livelihood and income stream is notably absent.

The immoral notion that human beings can be acquired, used up, demeaned, and then thrown away pervades the report. The notion that management persons are perfect by virtue of their position alone is illogical.

Here is an example of the mindset of Grote that informs his “advice” to disregard an employee’s humanity (and how he can discern what other people feel about his stealthy firing tactics always mystifies me; his pawns example people always agree with him (!)):

Actually, when slackers and slouches are finally fired, managers usually discover that coworkers are relieved. Their peers are the ones who have had to work harder to make up for their shortcomings and slacking off. When terminations are well justified and professionally executed, the rest of the work group realizes that this is a good place to work.

But when obvious losers and occupational ne’er-do-wells are allowed to continue in their positions unchallenged, the message to the talented and energetic is that this is a place to avoid. Those who can find other jobs leave; the ones who stay are those who prefer an employer with low standards.

A final note: The most common problem with terminations is that they don’t happen as fast as they should. Once the decision has been made to pull the plug and start over, don’t dillydally in the misguided hope that — somehow — things may still work out. They never do. Remember: It’s not the people you fire who make your life miserable. It’s the ones you don’t.

Organizations using any procedure promoted by Grote must be aware of his pedigree and the organizational failures that have resulted from using forced ranking (notably the former Enron but also other organizations covered in this blog, the Federal Reserve Board, Amazon, Microsoft, Vanguard, Mount St. Mary’s University, Yahoo).



General Accountability Office: The So-Called Performance Audit Is a Weak Analytical Tool; Continued Use Is Offensive to the Taxpayer

The General Accountability Office (GAO), one of the legislative agencies, produces so-called performance audit reports on governmental operations. If these reviews were limited to the strengths of accountants and auditors–financial statements and financial records–the agency would do well.

When accountants and auditors venture into non-financial operations and dare to offer opinions through so-called performance audits, the weakness of the agency is made manifest. This weakness leads to damaging, reckless, and information-free yet jargon-filled reports. (Note: I have found similar results with some reports of some Inspectors General offices.)

Performance audits evaluate evidence against stated criteria, such as specific requirements, measures, or defined business practices. This definition of performance auditing is consistent with international auditing standards.

The Washington Post published two exasperating columns based on this flimsy GAO report, GAO-16-520R, Federal Workforce: Distribution of Performance Ratings Across the Federal Government, 2013.

The GAO report writers stated on page 1 and 2 that Senator Ron Johnson (R-Wisc.) asked the GAO to review the performance management systems across the 24 Chief Financial Officer Act agencies. (See Pub. Law. 101-576, sec. 5.) The GAO’s “review” approach was to complete a performance audit listing the results of the implementation of the agencies’ performance management systems, specifically how many employees got each rank level.


This methodology made the resulting report useless, uninformative, and damaging to civil service employees burdened with unfair ratings, managers, agencies or any combination of the previous three factors. Notably, the report failed to do the following, at a minimum:

  • The structure of each of the agencies’ programs were not reviewed.
  • The evaluation as to how the agencies programs satisfied the merit principles was not done.
  • The academic research reviewing performance management is nowhere in the report.

The agency goes through great effort to support the status quo and uses only its own research to support its findings. This error is produced by the myopic methodology for the report.

The methodology is the most important part of any GAO report as it governs the method that the report would be put together. However, it also is the greatest weakness of the report as it excludes any finding that does not fit the methodology. As a result, GAO performance audit reports are not truly investigatory but rather a fancy way of self-congratulating the report writers’ “intelligence”.

The painful side effect of such a limited “review” is that civil servants who suffer unfairness are ill-served by such a report. An example is the painful, waste-of-human-resources manner that the Federal Reserve Board (Board) (not a CFO Act agency, but its operations serve as an example) does its performance management system, the so-called PMP.

The Board, using “rank and yank” policies fires a percentage of staff every year through targeting some employees with low ratings. Such low ratings place these employees on a list to be fired. Before losing the position, the target is offered a settlement agreement, in which severance is offered and, most importantly, the low rating is raised to satisfactory level. In exchange, the target is asked to release the agency from any legal claims of liability.

In this way, the Board can publish numbers showing that all employees got satisfactory or above ratings, while simultaneously covering up its firings.

Thus, the weakness of the GAO’s performance audit method is demonstrated with these facts from the Board, and shows the GAO as an impotent, insular, ineffective, and insulting-to-the-conscience agency when it does work in the performance management area.

I continue to be unimpressed and disgusted with the GAO; I will not give credibility to any of its work unless serious improvements are made in its reporting operations. Namely, extensive research and analytical work product that considers all facts and possibilities, not just proving an insular hypothesis.


Dick Grote: “Rank and Yank” Apologist Disagrees with Holacracy. Why? Holacracy Eliminates the Management Class

In a Bloomberg BNA article, “Is a Manager-Free Company a Good Idea?” Dick Grote, the creator of a management-focused and -dependent forced-ranking system (also known as “rank and yank), disagreed with the implementation of holacracy. (Of course, the success of holacracy means the end of the management class; employees will govern themselves.) What was delightful to experience in reading this Grote quote (below) is the wish for Grote to save managers’ jobs while relishing in the deliverance of abusive treatment and pink slips to rank-and-file employees.

“I think there’s a core flaw in the concept” of holacracy, Dick Grote, founder of performance management consultancy Grote Consulting Corp. in Frisco, Texas, said in a Feb. 16 interview with Bloomberg BNA. “The flaw is the abandonment of a structure, hierarchical management, that has worked for thousands of years.” He cited figures as diverse as Moses and Julius Caesar and organizations like the Catholic Church as examples of successful use of hierarchy.

“There are bumps in the process, but there is nothing that has come along that beats hierarchical structure,” Grote said. Experiments like Zappos are “like trying to put 1800s Shakers into modern corporate culture,” he said.

Moreover, Grote said, employees are terrible judges of their own performance and need immediate supervisors for a realistic performance appraisal. All employees want to know “one, what do you expect of me, and two, how am I doing at meeting your expectations? Organizations have an ethical obligation to answer those questions,” Grote said. “Holacracy removes the ability to give that to people.”


Artist: michael sloan


Grote’s system bolsters and magnifies management power. However, should the employee be expected to self-manage their tasks, management power is reduced. Likely, there would need to be a systems coordinator, but, definitely, the number of managers would be sharply reduced.

How interesting that Grote is so fast to fire employees, but at the same time is protective of management positions. What a juxtaposition! Yet another example of the total failure of the rank and yank system.

Department of Defense: General Schedule May Have a Long Tenure, But Still Effective; Dick Grote-Style Pay-for Performance is a True Failure

Artist: michael sloan
Artist: michael sloan

It seems that the idea of pay for performance-no matter the numerous failures (documented, in part, in this blog)-has yet again reared its failed head at the U.S. Department of Defense (DoD). Pay for performance is to replace an “aged” General Schedule system, the DoD proponents posited. A system’s age is irrelevant; whether it functions in a way that those it applies to can accept is more important.

The DoD proponents propose undemocratic, unfair, and dictatorial pay-for-performance policies that betray the democratic republic foundations of the country. In addition, the DoD proponents should never forget that the employees are also United States citizens and permanent residents and taxpayers and that agencies have authority through the consent of U.S. citizens and residents.

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

The DoD, and their bosses in the Congress and in the Executive Branch, should tread carefully in any move to alter the General Schedule unless the replacement can be well accepted as the General Schedule. Pay-for-performance systems are at their foundation unfair, subject to management abuse and manipulation without equivalent accountability for those managers, and render the employee powerless and subject to management ambush and destruction of employee livelihoods.

Dick Grote’s Forced Ranking Amazon.com [New York Times article] Department of Defense [Washington Post column by Joe Davidson]
Anytime Feedback Tool-allows co-workers to send feedback to one’s manager without the targeted employee’s knowledge. Jeff Bezos, chief executive officer of Amazon, is an investor in Workday, which seeks to bring this “gem” to other organizations which purchase it. “Force of the Future launches a strong attack on the General Schedule, saying it “is wholly inflexible and ill-suited to attract critical skills or motivate high performers.” In the name of fairness, “the promotion system primarily rewards time in grade,” the document adds, “instead of identifying, rewarding, and motivating high performers, the GS system rewards mediocrity.” ” [Note: Dick Grote uses similar language. http://www.groteconsulting.com/the-rationale-for-forced-ranking/]
Manager sets tough objectives and expects the employee to figure out how to satisfy the manager’s expectations “Molly Jay, an early member of the Kindle team, said she received high ratings for years. But when she began traveling to care for her father, who was suffering from cancer, and cut back working on nights and weekends, her status changed. She was blocked from transferring to a less pressure-filled job, she said, and her boss told her she was “a problem.” As her father was dying, she took unpaid leave to care for him and never returned to Amazon.

“When you’re not able to give your absolute all, 80 hours a week, they see it as a major weakness,” she said.”

“Officials want managers to have more authority so they can “divest low performers” —  in other words, fire them. “The current performance management system does not effectively hold low performers accountable, offering few negative consequences when an employee falls short of expectations, and gives supervisors unwieldy options for intervening,” the DOD proposal says.”
Callibration meeting Each year, the internal competition culminates at an extended semi-open tournament called an Organization Level Review, where managers debate subordinates’ rankings, assigning and reassigning names to boxes in a matrix projected on the wall. In recent years, other large companies, including Microsoft, General Electric and Accenture Consulting, have dropped the practice — often called stack ranking, or “rank and yank” — in part because it can force managers to get rid of valuable talent just to meet quotas.

Preparing is like getting ready for a court case, many supervisors say: To avoid losing good members of their teams — which could spell doom — they must come armed with paper trails to defend the wrongfully accused and incriminate members of competing groups. Or they adopt a strategy of choosing sacrificial lambs to protect more essential players. “You learn how to diplomatically throw people under the bus,” said a marketer who spent six years in the retail division. “It’s a horrible feeling.”

Unique to Discipline Without Punishment is the final step before an employee’s termination – the Decision Making Leave. The employee is suspended for a day with full pay. On this day he must make a final decision: either solve the problem and commit to fully acceptable performance, or quit and find more satisfying employment somewhere else. Performance Improvement Plan--“confidential” and among other expectations of the PIP is that the responsibility for bringing performance to the acceptable level rests with the targeted employee. “It would allow top officials to suspend an employee without pay. They would have 30 days to prepare a written statement of specific charges, but the employee would have just seven days to respond. That time discrepancy is one example of the plan’s power shift.”

Civil Service Reform: Current System Not Working; Move to New System Unwise

There are calls to reform the civil service (Partnership for Public Service), but the existing civil service is not functioning properly. A number of events urges better implementation of the current civil service and caution about further strengthening authority to an unaccountable management class.


Below is a table of several topics that demonstrate that much needs to be improved under the current rules before thinking of moving to new, untested civil service system.

Civil Service Event Coverage Comment
Artis v. Bernanke, employment discrimination case at the Federal Reserve Board https://alexwdc.wordpress.com/?s=artis 18 year duration for this case represents systemic failure.
Use of forced distribution at the Federal Reserve Board https://alexwdc.wordpress.com/?s=federal+reserve
Partnership of Public Service argument for civil service reform https://alexwdc.wordpress.com/?s=partnership Group envisions economic punishment of no raises (or self-firing) in its format for forced distribution.
Merit Systems Protection Board and methods to address so-called poor performance Washington Post: http://www.washingtonpost.com/blogs/federal-eye/wp/2015/08/06/the-top-five-ways-federal-managers-fail-to-fire-their-low-performers/ Poor performance lives in ambiguity; MSPB does not even attempt to define the term used to damage or end careers.
Commerce GS-15 manager alleged of several incidents of misconduct Washington Post: http://www.washingtonpost.com/blogs/federal-eye/wp/2015/09/02/commerce-official-let-her-kids-watch-porn-on-federal-computers-then-told-investigators-she-saw-nothing-wrong-with-it/ Commerce Office of Inspector General report: https://www.oig.doc.gov/OIGPublications/OIG-14-0153.pdf
Fired civil servant who filed complaints with newspaper, his congressional representative and staff, and nonprofit group, shoots and kills security guard and himself Washington Post: http://www.washingtonpost.com/blogs/federal-eye/wp/2015/08/27/federal-employees-and-contractors-face-danger-even-death-just-doing-their-jobs/
Diversity and inclusion issues at the federal financial regulatory agencies https://alexwdc.wordpress.com/?s=diversity


In general, the situation is grim.
Non-civil-service event but informative–abusive work environment at Amazon.com. https://alexwdc.wordpress.com/?s=amazon

The New York Times: http://nyti.ms/1ISY0xv

The New York Times: http://nyti.ms/1zoKGPy (Supreme Court rules that Amazon does not have to pay employees for time spent in warehouse security lines after end of shift.)

Salon: http://www.salon.com/2014/02/23/worse_than_wal_mart_amazons_sick_brutality_and_secret_history_of_ruthlessly_intimidating_workers/

Eye-opening articles