Dick Grote: Favors Unjust, Unfair “Rank and Yank” Performance Management, Despite Practical Evidence that Rank and Yank Is a Failed System

Dick Grote, owner of Grote Consulting (“strategy-based performance management”), spoke on NPR’s “The Diane Rehm Show” on March 19, 2014.

I have covered Grote’s unworkable and organizationally destructive “rank and yank” system in this blog. It is the sole basis of his company’s existence–to profit himself and also managers and those employees deemed “high performers” at a cruel and immoral expense of other people’s (80% of the workforce) livelihoods–so it is unsurprising that he zealously defends it in the face of two organizations (Adobe and CEB) that stopped using it because rank and yank inhibits collaborative work practices.

At its best, rank and yank encourages unjust, artificial comparisons of employees with each other (not their work assignments) and permits total and unaccountable managerial power over powerless subordinates. Rank and yank is a system that is properly avoided by rational firms. In addition, employees are not rated against goal achievement (absolute comparison), they are rated based on their relative worth to the company compared with another employee (relative comparison). Grote deceptively skirts the issue knowing that deep analysis of relative comparision will lead to people rejecting it.

Thus, I was disappointed, but not surprised, that Grote uses double talk to present rank and yank’s inherent negativity (displayed in red font color) as positive (dark blue font color).

GROTE

11:17:12

Yes, it is. And what forced ranking is is a pejorative term, and actually, organizations have almost abandoned the use of the term, forced ranking, because it carries so much negative baggage. But the fact is, what forced ranking involves is relative comparison. When we look at evaluating how well a person on a job is done, there are basically two ways we can do it. One is, absolute comparison. How good a job did George do against his goals and objectives and expectations? The other way we can evaluate the performance is through relative comparison.

GROTE

11:17:50

How well did George do compared with how well Mary and Sam and Bill did? And I think both of those are important spectacles to have in the lens, to understand just how well someone has performed.

The issue that causes rank and yank to be a flawed system is managers are given absolute power (in secret) to rate others without facing any sort of accountability. Indeed, Grote expects that the managers will determine for themselves whether they are objective and fair in giving their opinions over a subordinate. The power disparity in the relationship permits rampant, unchecked abuse of the employment relationship in the rank and yank process. [Note in the discussion, below, how Grote pivots from the observation that a supervisor’s opinion is subjective to a nongermane discussion of objective and fair. Without accountability for their “opinions” on subordinates, “opinions” from these supervisors will most likely be unobjective and unfair.]

 GROTE

11:26:00

Yeah, well, let’s take a look at the fundamental question, what is a performance appraisal? And the answer to that question is, a performance appraisal is a formal record of a supervisor’s opinion of the quality of an employee’s work. And right away that word opinion seems to vibrate in neon lights because people believe that if it’s someone’s opinion, then it’s necessarily subjective.

GROTE

11:26:30

And, Frank, every time I hear someone say that, I feel sad because what that says is that the person doesn’t know what the word objective means, what it means to be objective. What it means to be objective is to be uninfluenced by emotions or personal prejudices. It means to base your opinion on facts and present those facts — present the examples factually. It means to be fair. And so of course what we want our supervisors to be is to be fair in rendering their opinions.

In order to be truly objective and fair, one solution is to have the subordinate rate the supervisor. This check will resolve the power disparity and provide instant accountability.

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Dick Grote: “Poor Performance” as Cover for Persistent Unstable Employment and Institutionalized Managerial Bullying

Dick Grote, of Grote Consulting (“strategy-based performance management”), is an apologist for a forced-rank performance evaluation. While a system that is used in large private-sector organizations, whose main purpose is to provide profit to the shareholder, it seems that the practice is entering other organizations, government, health care, or education, whose main purpose is to provide service to human beings. As a result, use of the bell curve system in any non-private-sector organization is akin to a hammer looking to make nails that it could strike.

The whole system of performance appraisal is destroyed with bell curve systems. The goal of such systems is not the improvement of staff but rather the assurance that a certain percentage of staff will be fired each year through assignment of employees to so-called buckets by line management and those choices are reinforced by upper-level management. Fair treatment of the rated employee goes out the window because the only concern is the rigid consistency of the bucket assignments regardless of the workplace situation, including managerial abuse or incompetence.

Bucket

 (rank)

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

If the selection seems to overload the firing group with protected class members, there is no failsafe; the filigree of “poor performance” is used as a justifying and protective cover. This cover can be questionable with the overwhelming of protected class members in the group slated for firing without any substantive review by any member of management, to the insult of all the civil rights laws, which were all hard won.

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).

If the concern is to ensure a rigidly applied performance system, then you cannot have a truly honest and objective forced ranking procedure; the only concern is the ranking process itself, not its effect on the targeted employee, which can include the (secret) managerial targeting of protected class members to be placed in the C bucket and fired.

Nowhere in any of Grote’s writings does he address managerial misbehavior, which is quite likely given that the C bucket people do not have any realistic chance of reversing the (secret) decision (Grote, page 11) and the script for C bucket personnel is so witheringly negative such that it encourages abusive, bullying behavior toward the people forced into the C bucket (people who are dehumanized consistently in Grote’s writings) in order to support and justify the rigid, top-down, take-it-or-leave-it system.

For example, the manager documents the C bucket employee’s “failures” for an extended period,

Phase two is execution. One of the most important things here is to keep an ongoing performance log. As much as we talk about that, it is one of the toughest things for managers to do on an ongoing basis. A Web-based system is so powerful because it makes it easier for managers to do this. When we designed the Grote System, we created an email reminder system that signals managers to do this on a regular basis. By doing this throughout the year, you overcome the most serious of all rating errors, recency effect. With the recency effect you only base your rating on the most recent outcomes that you can remember. Managers should also update goals and objectives as conditions change. My third tip is to conduct a tough mid-cycle review. We know that a review half way through the year is important. If a manager has a particularly tough employee, the mid-year review is the opportunity for them to lay out difficult expectations before the end of the year. Managers should err on the side of being excessively tough in the mid-year review as a way of building performance.

but the targeted employee is given only short notice for a “performance review” meeting.

The final stage of the performance appraisal is the performance review. One tip I have is to give the appraisal form to the employee for review an hour or two before the meeting. By doing this, employees have a chance to review the comments and prepare a list of questions to help them fully understand the evaluation. This helps to reduce the defensiveness that tends to come out in performance discussions. Another quick tip is to gain understanding from the evaluation process, not agreement. The tougher a manager´s expectations and demands are, the less likely you are going to get full agreement from an employee. That´s OK because your purpose is not to gain agreement, but to gain understanding.

Finally, remember the words of John Dillinger, the bank robber. He once said, “Before you rob your first bank, knock off a couple of gas stations.” If you´ve got one person amongst your subordinates that is going to be a particularly difficult review, do not start with the tough one. Start with the easy employees and work your way up.

Employees of all organizations need to be aware of the negative consequences of secretly applied forced-rank performance systems.