Rank and Yank

Topics: Ranking, 360-degree feedback, Non-parametric statistics Pages: 4 (1299 words) Published: October 6, 2012
Performance appraisals will always be an intricate part of an organization’s human resources. The Encyclopedia for Business, 2nd ed. defines a performance appraisal as a process by which organizations evaluate employee performance based on preset standards. The main purpose of appraisals is to help managers effectively staff companies and use human resources, and, ultimately, to improve productivity. However, the role of performance appraisals and their purpose have been subject to positive and negative feedback amongst employees, and outside critics. No matter how you look at performance appraisals, the existence of some form of rating system will ensure that the right people are in place to execute the strategy and maximize success. Some of the most common forms are ratings scales, 360–degree feedback and management by objectives (MBO). The most scrutinized of the different forms is a type of ranking format known as forced-ranking or ‘rank and yank.’ A closer look into the history of the ‘rank and yank’ system will be provided along with detailed information of the how it works. Opinions and views will be shared so as to determine whether it’s a system that coincides with the definition of a performance appraisal.

The rank and yank system was designed and implemented by Jack Welch when he performed his duties as the CEO for General Electric (GE). Rank and yank is a forced-ranking system that is an employee performance review system where workers within groups or departments are rated best to worst with the lowest ranked workers either terminated or considered for termination (American Business). Each year, employees are ranked in a distribution of 20-70-10. Twenty percent of the employees received stars as a performance ranking while 70 percent were “acceptable” and the remaining 10 percent were designated as “needs improvement.” Of that 10 percent, employees are given the opportunity to improve and move into the 70 percent or face termination...

References: American Business. (2010). Forced-ranking systems (forced distributions, “rank and yank”).
Retrieved on August 2, 2012 from http://american-business.org/383-forced-ranking-systems.html
Greenwald, J. (2001). Rank and Fire. TIME Magazine. Retrieved on August 1, 2012
from http://www.time.com/time/business/article/0,8599,129988,00.html
Kwoh, L. (2012). ‘Rank and Yank’ Retains Vocal Fans. The Wall Street Journal. Retrieved on
August 1, 2012 from http://online.wsj.com/article/SB10001424052970203363504577186970064375222.html#printMode
Milkovich, George (2010). Compensation 10th Ed., McGraw-Hill/Irwin.
Performance Appraisals and Standards. (n.d.). Encyclopedia for Business, 2nd ed. Retrieved on
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The Holy Bible. Today’s New International Version. Barker: Zondervan, 2006
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