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)

Effect

A

20

Lavish rewards, encouragement

B

70

Little to paltry increase

C

10

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.

rank_yank
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.

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Federal Reserve Board (OIG Audit 2015-MO-B-006): Inspector General Issues Audit Report on Board’s Diversity and Inclusion Processes; Board’s Claim of Total “Independence” Unjustified

The Office of Inspector General (OIG) for the Federal Reserve Board (Board), responding to a 2014 Congressional request (Appendix A of the OIG’s report), performed an audit of the Board’s diversity and inclusion processes. On March 31, 2015, the OIG issued a report.

Authors of Board OIG Audit Report, 2015-MO-B-006
Name Title
Anna Saez OIG Manager
Kimberly Perteet Senior Auditor and Project Lead
Sopeany Keo Senior Auditor
Brian Murphy Auditor
Sean Newman Auditor
Timothy Rogers Senior OIG Manager for Management and Operations
Melissa Heist Associate Inspector General for Audits and Evaluations

Overall, I am disappointed with the overall stagnation of the Board; a situation caused by institutional zeal for broad independence through the Board’s citation of 12 U.S.C. section 244. And, I could understand an argument for only the Federal Open Market Committee and only monetary policy making.

But it is unreasonable to expect the people of the United States of America to accept an “independence” stance that requires the Board, a federal agency, to be free from federal employment statutes that were adopted into law long after 1913, including civil rights laws and Title 5 of the U.S. Code. Asking any citizen in the present day to respect employment law from 1913 or to allow the Board to choose which statutes it will follow (or comply with) is totally unacceptable.

The money that the Board, on which it conducts monetary policy, comes from the people of the United States of America, which has a government that possesses authority to govern through the consent of its people. Once the government loses that consent, authority is lost. The Board, in its quest to protect a nebulous independence for non-monetary-policy administrative activities, forgets this bedrock principle and risks institutional failure.


[Author’s note:  Congressional amendment of 12 U.S.C. section 244 is necessary regardless of the history of frustration with the Board. (I am aware of past difficulty with this subject. (See Auerbach, Robert D. (2008), Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan’s Bank, Austin: University of Texas Press, pages 122-124.))]


The Board must come into compliance with all civil rights laws and regulations and conform its policies to Title 5 in order to have full legitimacy. The Board’s “independent” behavior does not inspire confidence for the Board. For example, with the long case (18+ years as of the date of this post) involving employment discrimination, in Artis v. Bernanke or Artis v. Yellen or another employment discrimination case discussed in Auerbach, Robert D. (2008), Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan’s Bank, chapter 8, where an African American employee, holding a position of statistical assistant, ultimately had to sue for a promotion. Successful with the litigation, the affected employee won the promotion, back pay, and compensatory damages.

Litigation is expensive, and most employees cannot afford it. So to expect a rank-and-file employee to have an expensive legal process as the sole procedure to argue against the Board (which has all of its legal expenses are covered by the taxpayer (as the paper money comes from the economic activity of the country, not the Board)) is manifestly unreasonable.

Furthermore, I question the Board’s maintenance for broad statutory compliance exclusions when it fails to voluntarily evaluate its employment practices to ensure a fair and equitable workplace, separate from the Equal Employment Opportunity complaint context. When the outside consultant determined possible disparate impact, the Board argues that focus should be on a narrower ground–job level (page 99 of the report, memorandum from Don Hammond, Board Chief Operating Officer (COO), third full paragraph (citing Wal-Mart Stores v. Dukes, 131 S. Ct 2541, 2555 (2011)). [Author’s note: The Board is a fraction of the size of the Wal-Mart Company; the case does not prevent proactive, introspective inquiry.]

This point from the Board COO might have been a valid point except for the data in figure 4. In figure 4, most of the Black/African American employees are in the lower level of the agency. Also, in terms of performance ratings (Appendix F of the OIG’s report) between White and Black employees, White employees overall get the higher average performance ratings than Black employees. Certainly, an inquiry as to what factors lead to that result and whether bias enters anywhere into the performance appraisal process would be reasonable, if the goal is to maintain a truly fair and equitable workplace.

In addition, the Board’s COO reflects an obstinate attitude because if an agency is interested in a fair and equitable workplace, any receipt of possible disparity should initiate a voluntary, intra-agency inquiry as to whether any of its practices are causing any disparity (and providing any remedies), without waiting for an employee complaint. Such an adversarial attitude causes further distrust of the Board and demonstrates why more accountability to (and compliance with) all U.S. statutes regarding civil rights and federal employment is needed.

Dick Grote: Forced Ranking Procedures Empowers Managers to Take Advantage of Subordinates; Exemplifed in Grote’s Document titled “Performance Appraisal: Solving Toughest Challenges”

Dick Grote advocates for rampant abuse of employees in the forced-ranking process. Specifically, employees are responsible for doing the manager’s job of supervision and of satisfying the whims of their supervisor, and managers are merely expected to pass judgment on their subordinates and then presumably to sit in judgment at the calibration meeting.

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

At this calibration meeting, some of the beleaguered employees will then be selected for termination, abused during an “improvement period,” then likely fired. It seems that the best method for targeted persons to respond to this abuse is silence after a blanket denial of all accusations.

Selected quotes from Dick Grote (2000), “Performance Appraisal: Solving the Toughest Challenges,” HR Magazine, July.

There are two themes of management abuse of authority in Grote’s advice, which is detailed in the following chart. [My comments are in brackets.]

Abuse of Authority Situation Grote Quote or Proposal (and Page Number)
Responsibility shifting
Distant subordinate “The mistake appraisers make in this case is to assume that it’s their job to figure out an answer to the question [how to review someone the manager does not see very often]. It’s not. Make it the subordinate’s job.” (page 2)
Technically superior subordinate The same idea carries to this issue as the distant subordinate–the technically superior subordinate is expected to develop a plan for reviewing. (page 3).In addition, a group assignment is proposed–teaching the manager how to assess their work. (page 3) [Author’s note: Should not the manager be expected to do this on the manager’s own? Because the manager will be the only voice at the calibration meeting, all of this “education” may well be for naught.]
Older, more-experienced subordinate “The best way to deal with the highly experienced individual is to get right to the point at the start of the appraisal discussion: ‘Frank, you’ve been through this drill many times before. Let’s not waste any time on small talk. How do you think your department compares with where it was last year?’ Then shut up and listen, and proceed as you would with anybody else.” (page 4)[The manager should be on top of the business (and not expect the subordinate to do management work on top of his or her other duties (without extra pay)). That is why the extra pay for management is being paid.]
Power and Control; Ambush
Highly compensated individual (situation where the subordinate earns more than the manager (commissions)) [Why would a commission-sales-compensated person need a performance review, especially when earning good commissions?]Regardless, advice is provided: “The answer is also classic: just do what needs to be done. The fact that his compensation structure is different from yours is irrelevant. He’s paid to peddle potatoes (among other things). You’re paid to manage his performance (among other things). Do your job.” (page 4)
Dealing with unrealistic expectations (1) No self appraisal, unless required by company policy. (page 4)(2) For good solid performers [A and B buckets], give the appraisal in advance. (page 4)

(3) “For non contributors [C bucket]–give appraisal (negative) to person in manager-scheduled meeting: “Instead, wait until the person is actually sitting in your office before you give her the evaluation to read. You need to break the bad news face-to-face at the exact moment you’re going to discuss it. Forewarned is forearmed–and you don’t want to forearm a marginal performer.”

[This is an institutionally sanctioned ambush, which is totally unfair, especially since the calibration meeting is conducted in secret.]

Coping with defensiveness [When giving bad review and the response is bad.] “To start, do what every smart manager has learned to do. Put a box of tissues in your desk drawer. If tears start to flow, simply pull it out, put it down, look away for ten seconds or so, and then get back to the matter at hand.” (page 5)Moreover, Grote suggests when a rater faces ratee’s “defensiveness” (page 6)–

  • Allow the ratee to vent and listen to what is said.
  • Agree with the ratee’s right to have his or her own point of view.
  • Restate the ratee’s position, using pauses liberally.

Nowhere in this approach is the place where the rater expected to make any adjustments; therefore, this so-called listening is useless to the ratee. Indeed, the rating is fixed once established in the calibration meeting. [This is manipulation masquerading as managerial authority; companies that use forced ranking must be exposed.]

Dealing with discussion difficulties Grote’s general idea is that the rater accuses and the ratee responds to the accusations. (See page 7.) Should the ratee not respond, this action breaks the expected pattern Grote has established. Thus, Grote recommends asking a question then waiting. Should the ratee maintain his or her silence, Grote suggests repeating the question, and, if that does not work, conclude the meeting and define “insubordination” [?] to the ratee.[This is another example of the rampant abuse of authority present within forced distribution. The manager plans an ambush on the so-called C-ranked person and not only is the manager supposed to control the conversation, the manager is supposed to control the ratee’s reactions as well, as if the ratee was property of the rater. This process is disgusting and unacceptable.]

Should the ratee (unwisely) offer an excuse for the poor rating (implicitly agreeing with it and the bad treatment that will follow for a C-ranked person), Grote advises to make the issue one of “personal responsibility” and turn to the ratee and ask the ratee how they will deal with the comment.

[This is manipulative, especially within the context provided in the document: deadlines changing in the middle of the project. Silent is the reason for the changing deadlines. The situation leaves me with a strong suspicion that it is the rater that created a “crisis” in order to down rate the ratee. Then, this same rater has the gall to make the ratee responsible for the rater’s whims. See the definition of “gaslighting.”]

Focus on choices In the case of a discussion that veers away from the offloading of blame on the targeted C-ranked person, Grote offers a way for the rater to dismiss and redirect the conversation. (See page 7)

  • Acknowledge the topic’s importance, then
  • Consign it to the nether world of irrelevancies, and
  • Return to the primary issue on your [the rater’s] agenda
Ultimate solution Grote suggests that the rater develop a clear core message to deliver to the ratee. The ratee is supposed to repeat this core message upon request of the rater [insulting and childish]. (See page 8.)

Dick Grote and the “C Bucket”: “Messy Performance Reviews” Document Explains Forced Ranking Relies on Abuse of Managerial Power and Denial of Information to Affected Employees

This blog covers “rank and yank” , and its apologist, Dick Grote, because of the raw, deceptive use of managerial authority that forced ranking performance management programs permit in the name of being “tough”.

But on whom is this toughness imposed? The vulnerable employee who is left out of the near-conspiratorial management calibration meetings and is completely unaware of the management’s coalition-derived decision to fire the employee.

“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.)

Take, for example, Dick Grote’s PowerPoint presentation (titled “Messy Performance Reviews”) to managers about so-called messy performance reviews. Grote’s document presents an internal inconsistency, considering employees imperfect and managers as perfect, although both are imperfect human beings.

Grote argues differently. Employees, on page 26 of the Grote PowerPoint, are self-deluded; however managers (also supposedly human beings) are not subject to self-delusion and are deemed to be objective and to act with integrity (page 24). I suggest that mere job titles does not change human behavior.

Because of this reality, I would consider as suspect any mere supervisory “opinions,” which are the exclusive basis of the performance appraisal. Grote notes that expectations of quantifying performance with firm facts is a “myth” (page 10). Moreover, no one but the management determines whether the ranking is fair or objective (page 22). And, the employee has no real ability to change or contribute to the document (pages 28, 29, 30, 33, 34).

The inhumanity and psychological cruelty of forced ranking is revealed in the treatment of the so-designated “low performers. (That numerous organizations have adopted this financially destructive plan to apply exclusively to their subordinates is galling.)

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

Page 51 explains that low performers (the “C bucket”)–

  • Are not provided a copy of the appraisal in advance (A- and B-designated employees are provided with the appraisal in advance (page 34). No explanation is provided for this difference in treatment.).
  • The point is delivered bluntly: there is “bad news,” the appraisal is not good, and the affected employee, now flustered and surprised, is given the document to read (while the manager has long prepared for such an ambush (unacceptable abuse of authority)).
  • The subordinate then reads the document right there in the meeting.

This is unacceptable treatment based on an arbitrary ranking. Close examination of the operation of rank-and-yank programs shows why these rank and yank systems simply do not work because of institutional abuse of authority and rampant lack of accountability or fairness.

What it [rank and yank] does depend on is the willingness of managers to fight for valued employees during what can swiftly become a brutal horse-trading session. “Even if everyone did great,” says the former Enron employee, “someone has to fall into the ‘needs improvement’ category.” (John Greenwald (2001). “Rank and Fire.” Time. (June 11)).

Here is Grote’s method of dealing with so-called messy issues (page 54, seemingly the manager’s justification for the low rating, established in a secret calibration meeting):

  • Manager’s perception the crucial factor for deciding whether the issue is important (one of the issues is “credit grabbing”),
  • The targeted employee is responsible for managing the manager’s perceptions, and
  • The targeted employee is responsible for finding and implementing a solution (to the manager’s own perception (!))

Employees often are unaware at the level of planning that is involved in the execution of targeted employees’ careers and financial security. Hence, there is a need for all people who work for a living to be aware of the rickety mechanics underlying rank and yank programs.

[Author’s note: Enron declared bankruptcy on December 2, 2001.]

Dick Grote and “Rank and Yank”: Argument that Performance Management is ‘Hard’, Requires a Perfect World and Perfect Management–Such Does not Exist

Dick Grote of Grote Consulting has posted a video clip (see below) stating that “performance management” is supposed to be difficult. Given that he speaks exclusively to management, this difficulty is supposed to be given only to employees through a forced distribution curve (or “rank and yank” or so-called pay-for-performance systems).

A serious flaw of Grote’s work and of rank and yank is that it does not consider that grave errors will be made with such a system in a country like the United States, with an extensive practice of chattel slavery and pervasive racial discrimination, where there is still income and racial inequality as well as profound power concentration in the hands of a relative few. In such circumstances, rank and yank simply cannot work as it becomes an instrument to enforce illegitimate power and unfair and illegal bias toward members of minority groups. Equality, theoretically construed, does not exist in reality.

Yet, shockingly, rank and yank depends on a presumption of theoretical equality (and that perfect human beings are selected into management–certainly not true).  It is no surprise then that rank and yank has not worked well in any organization in which it has been implemented, except by distributing risk and financial loss to the powerless.

In addition. the civil rights laws and regulations and minute, but at least continuing, social improvements must not be turned back because of unfair “performance management” practices.

Policymakers must be careful.

Employees, also, must investigate potential employers and their management to see if “incentive pay,” “pay-for-performance plans,” or rank and yank is being used in the workplace. If so, an appropriate compensation for the risky, unstable work environment such plans cause is significantly more cash compensation.

 

Dick Grote and “Rank and Yank”: Ranking and of “Calibration Meetings” Provoked Chaos at Yahoo, Inc.; Another Warning to Avoid or Remove Forced Distribution Evaluation Systems

The story of the damaging effects of forced distribution rating systems (“rank and yank”) are rarely discussed. But, because of the ill effects on employee’s livelihoods, policy makers must thoroughly investigate and examine forced distribution performance evaluation systems, primarily advanced by Dick Grote and similarly minded apologists.

The quote from the New York Times Magazine illuminates the chaos of forced distribution and corrosive effect on collaboration and on the organization itself. Simply put–forced distribution, in whatever form, does not work. The reasoning for being forced to give a negative review (that is, an effective notice of termination) to somebody on arbitrary and capricious reasons in so-called calibration meetings is an absolute notice of warning before using such rating systems. (Emphasis, in bold, is from the blog author.)

[Marissa] Mayer’s largest management problem, however, related to the start-up culture she had tried to instill. Early on, she banned working from home. This policy affected only 164 employees, but it was initiated months after she constructed an elaborate nursery in her office suite so that her son, Macallister, and his nanny could accompany her to work each day. Mayer also favored a system of quarterly performance reviews, or Q.P.R.s, that required every Yahoo employee, on every team, be ranked from 1 to 5. The system was meant to encourage hard work and weed out underperformers, but it soon produced the exact opposite. Because only so many 4s and 5s could be allotted, talented people no longer wanted to work together; strategic goals were sacrificed, as employees did not want to change projects and leave themselves open to a lower score.

One of the uglier parts of the process was a series of quarterly “calibration meetings,” in which managers would gather with their bosses and review all the employees under their supervision. In practice, the managers would use these meetings to conjure reasons that certain staff members should get negative reviews. Sometimes the reason would be political or superficial. Mayer herself attended calibration meetings where these kinds of arbitrary judgments occurred. The senior executives who reported to Mayer would join her in a meeting at Phish Food and hold up spreadsheets of names and ratings. During the revamping of Yahoo Mail, for instance, Kathy Savitt, the C.M.O., noted that Vivek Sharma was bothering her. “He just annoys me,” she said during the meeting. “I don’t want to be around him.” Sharma’s rating was reduced. Shortly after Yahoo Mail went live, he departed for Disney. (Savitt disputes this account.)

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.