Stack Ranking is somehow still a thing in Corporate America

This week over on CNBC.com a pretty major piece dropped on the workplace culture at Facebook, for years one of America's Top/Best/Greatest places to work, but after a really tough 2018 on a number of fronts, has seen both its market value and its employee morale decline.

There is a ton of detail in the report, but one of the primary contributing factors that led CNBC to describe the workplace culture as 'cult-like', was the company's approach to managing employee performance. Two specific performance management practices were called out for having potentially negative or detrimental impacts on culture and engagement.

The first practice is Facebook's requirement that employees solicit 5 peers at the company to provide feedback on their performance two times a year. This feedback can be given to the employee or to the employee's manager and is kept confidential and importantly, cannot be questioned or challenged. Critics of the process claimed it leads to employees having to make sure they buddy up to a number of colleagues in order to ensure positive feedback only is given, and serves to hide or ignore negative feedback or even just honest and open dialogue.

But the second, and probably more important performance management practice in place at the company is a familiar one - the now infamous 'Stack Ranking' of GE and Microsoft fame. Under Facebook's Stack Ranking process, employees are placed (after a lengthy talent calibration exercise), into one of 7 performance categories, with semi-strict percentage quotas and limits for each category being enforced by management.

For example, the top category or highest grade is given to fewer than 5% of employees, while a grade of 'Exceeds' is said to not to exceed about 35% of staff. The CNBC piece cites several anonymous former Facebook employees who indicated that they felt like they had to invent or stress overly negative feedback and comments for employees in order to avoid having too many of their teams in a given performance category - a common problem with just about all Stack Ranking systems.

While in some circumstances and companies (heavy, sales driven ones for example), Stack Ranking can and does work fairly well in setting expectations and managing employee performance. But in complex, creative, technical companies like Facebook, the practice almost always leads to infighting, politics, favor trading, and ultimately, unhappy teams. GE and Microsoft both eventually shifted away from Stack Ranking, it will be interesting to see if this piece and other problems at Facebook will lead them to do the same.

Really interesting stuff and a fascinating look at how a fundamental HR/Talent Management practice is impacting a major organization. It will be interesting to see how it plays out.

Have a great day!

PODCAST: #HRHappyHour 349 - Unlocking High Performance with Jason Lauritsen

HR Happy Hour 349 - Unlocking High Performance with Jason Lauritsen

Hosts: Steve Boese, Trish McFarlane

Guest: Jason Lauritsen

Sponsored by Virgin Pulse - www.virginpulse.com

Listen HERE

This week on the HR Happy Hour Show, Steve and Trish were joined by Jason Lauritsen, Employee Engagement expert and author of Unlocking High Performance. On the show, Jason shares many of the insights and lessons learned from his career as a human resources leader, consultant, speaker, and thought leader on employee performance and engagement.

Jason shared some of the big ideas in Unlocking High Performance such as how work has fundamentally changed from a contractual agreement to more of a relationship-based agreement, how understanding that work is a relationship is critical for employers to understand how to engage employees and create an environment for high performance, and then some of the approaches to create a successful performance management program by focusing on planning, cultivation, and accountability. This is a big book with lots of great ideas and on the show we tried to give listeners a taste of what Unlocking High Performance is all about.

Listen to the show on the show page HERE, on your favorite podcast app, or by using the widget player below:

Thanks Jason for coming on the show!

Remember to subscribe to the HR Happy Hour Show on Apple Podcasts, Stitcher Radio, Google Podcasts or wherever you get your podcasts - just search for 'HR Happy Hour'.

A reminder to evaluate the work, not just the person doing the work

Here's a super interesting story from the art world that I spotted in the New York Times and is titled The Artwork Was Rejected. Then Banksy Put His Name To It.

The basics of the story, and they seem to be undisputed, are these:

1. The British Royal Academy puts on an annual Summer Exhibition or Art, and anyone is allowed to submit a piece of art for consideration to be included in the exhibition.

2. The anonymous, but incredibly famous, artist Banksy submitted a painting, but under a (different) pseudonym - 'Bryan S. Gaakman' - which is an anagram for 'Banksy anagram'.

3. 'Gaakman's' submission was declined inclusion in the exhibit by the event's judges.

4. One of the event's judges, contacted Banksy (how one contacts Banksy was not fully explained), to inquire if the famous artist had a submission for the exhibit. This judge did not know that 'Gaakman' was actually Banksy.

5. Banksy submitted a very slightly altered version of the 'Gaakman' piece to the exhibit - and was accepted for the show. Basically, the same art from 'unknown artist' was declined, but for the famous Banksy it was deemed worthy.

What can we take away from this little social experiment? Three things at least. 

1. We always consider 'who' did the work along with the work itself, when assessing art, music, or even the weekly project status report. We judge, at least a little, on what this person has done, or what we think they have done, in the past.

2. Past 'top' or high performers always get a little bit of a break and the benefit of the doubt. It happens in sports, when close calls usually go in favor of star players, and it happens at work, where the 'best' performers get a little bit more room when they turn in average, or even below average work. They have 'earned' a little more wiggle room that newer, or unproven folks. This isn't always a bad thing, but it can lead to bad decisions sometimes.

3. What we want, as managers, is good, maybe even great 'work'. But what the organization needs is great 'performers'. Great performers don't always do great work, but over time their contributions and results add up to incredible value for the organization. So in order to ensure that the organization can turn great 'work' into great (and sustainable) long-term performance, every once in a while less than great work, turned in by a great performer, needs to get a pass. Take the long view if you know what I mean.

That's it for me - have a great day!

The downside of performance transparency

Openness, transparency, shared and socialized goals - and progress towards attainment of those goals are all generally seen as positive influences on workplaces, organizational culture, and individual performance. We seem to value and appreciate a better understanding of what other folks are working on, how our own projects fit in with the overall organization, and probably more than anything else - we like the idea that performance management, ratings, promotions, and compensation are, above all else, "fair". And when we have that better sense of what people are working on, how much progress is being made, who in the organization is succeeding, (and when we believe the metrics that define success are also clear and visible), it seems logical that it will translate to increased engagement, productivity, and overall positive feelings about work and the organization.

But, (and you knew there had to be a but), sometimes, openness, transparency, and increased visibility to employee performance and the ability to compare employee performance can drive undesired and even detrimental employee behaviors. And a combination of performance visibility along with the wrong or even misguided employee goals can lead to some really unfortunate outcomes.

Example: What happened when surgeons in the UK began to me measured primarily on patient mortality and these measurements were made much more visible. 

From a 2016 piece in the UK Telegraph:

At least one in three heart surgeons has refused to treat critically ill patients because they are worried it will affect their mortality ratings if things go wrong.

Patients have been able to see league tables showing how well surgeons perform since 2014.

But consultant cardiac surgeon Samer Nashef warned that increased transparency had led to doctors gaming the system to avoid poor scores.

Just under one third of the 115 specialists who responded to Nashef's survey said they had recommended a different treatment path to avoid adding another death to their score. And 84 percent said they were aware of other surgeons doing the same.

So to re-set - UK surgeons were measured on surgical patient mortality outcomes. These outcomes were highly visible in the industry and by the public. And, as humans always seem to learn really quickly, surgeons began to 'game' the system by increasingly avoiding riskier surgeries for the sickest, neediest patients so as not to negatively impact their own ratings. So the sickest patients, with the most difficult cases found it harder to get the treatment they almost certainly needed. And the best, most talented surgeons, who should have taken up these complex cases, learned to avoid them, or pass them off to other, less talented doctors.

So the combination of the wrong, or at least imperfect performance metric, (surgical mortality), with the desire (however well-intentioned) to make doctor performance against this imperfect metric more transparent and visible serve to incent the wrong behaviors in doctors, and reduce the overall quality of care to patients - particularly the ones who were in the most dire circumstances.

The lessons or takeaways from this story?

Be really careful when making employee performance measurements open and transparent across the organization and beyond.

Be even more careful if you decide to focus on a single performance metric, that the metric is actually one that is meaningful and relevant to your organization's customers (and isn't one that can be gamed).

And finally, before you do either of the first two things, you spend some quality time with your organization's best performers to figure out what it is they focus on, how they measure themselves, and how they make sure they are providing the best service possible.

Chances are, in the UK surgeon case, none of the best surgeons would have said they became great surgeons by avoiding the most difficult cases.

That's it, I am out - have a great day.

Learn a new word: Abstinence Violation Effect

No, it's got nothing to do with THAT, get your minds out of the gutter for a minute.

I admit to not being familiar with this term until seeing the accounts of the demise of former Twitter CEO Dick Costolo's new venture - an app called Chorus. Chorus was a kind of a social fitness app where groups of friends would sign up/join up together, share their goals for exercise and other healthy behaviors, and remain motivated to keep up with these goals leveraging their friends on the app to keep them going (and accountable).

The idea for Chorus was that once your fitness goals were social and semi-public, you wouldn't want to let down your team and friends, (and risk some level of open embarrassment), by slacking off, or not keeping your commitments.

But as it turned out, at least for Chorus users, this wasn't enough to keep users of the app from continuing to engage with their goals and their teams. Once users began to fall behind, maybe due to illness or travel or work or because exercising is a real drag sometimes, they simply stopped checking in on the app altogether. You could say they ghosted their fitness teams. They would not come back to the app once they had felt like they failed, (and everyone else on the team knew).

Turns out this phenomenon has a name, (who knew?), called the Abstinence Violation Effect which can be described as when people hide from their support group (exercisers, people trying to quit smoking, people who buy too many pairs of sneakers) when when they fail to meet the group's expectations, instead of turning to the social group for help during these periods.

The Chorus app users who had lapsed in meeting their fitness goals never really came back to the app, and since everyone who has ever tried to stick with an exercise regimen has likely lapsed at one point, the demise of the app was pretty explainable.

Why bring this up, i.e. why should you care?

Probably just to serve as a reminder that just having a support group in place and available isn't enough for a person who really needs help - to exercise, to quit a bad habit, to start a better habit, etc. Just being there isn't going to help the person who has really withdrawn.

Setting smaller, tangible  goals along the way, with regular check-ins and rewards for effort and progress is probably going to give the user, (and the team) a better chance to remain engaged with the overall goals and with each other as a group.

The support group isn't there to 'help you get healther' it is there to help you walk 5,000 steps this Wednesday, to buy some healthy snacks on Friday, and to go with you while you attend a yoga class on Saturday morning. These kinds of small, incremental, but tangible kinds of things can help both parties remain connected and accountable to each other.

It is really easy to ghost a support group whose purpose is to 'help you get healthier'.

It is much harder to pull a no-show at a Yoga class on a Saturday morning when your workout pal is already there at the studio waiting for you.

Interesting stuff. And in case you were wondering, yes, I have purchased too many pairs of sneakers.

Have a great day!