6 Facts About Stack Ranking Employees: Methodology and Examples

What are some facts about stack ranking employees? Getting a job is only half the battle. The other half is actually meeting the expectations and sometimes exceeding them. Employee evaluation is a basic part of the manner in which employee performance is assessed, and then rewarded with increase in salaries, promotions, and perks. This results in a perceived motivation for employees to continue working harder and do better work. Though it is not so simplistic in terms of real life employee employer relationships, most companies follow some variation of this theme. One way to do this efficiently is to use a method known as stack ranking. It was hugely popular in the past, but it is still in use today. The idea behind this method is that all employees would not be equal achievers. The evaluation is based on a bell curve in which the top 20% are high achievers, the next 70% are satisfactory, and the lowest 10% would lose their jobs because of low achievement. This puts constant pressure on employees to work harder all the time just to keep their jobs.

Tie, Necktie, Adjust, Adjusting, Man, Business

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However, in recent years, many companies have understood that such a system affects the morale of the entire staff and have made a move to abandon this and move towards more inclusive and flexible practices. The practice of stack ranking lasted for more than two decades as a popular method of evaluating employee performance. However, despite the decline of stack ranking, there are some interesting facts about stack ranking: methodology and examples. Number one would be that it was developed by Jack Welch, the CEO of General Electric. He called it the 20-70-10 system. Welch worked on the system in detail and came up with characteristics for each group.

Another interesting fact is that 49% of businesses were using this system in 2009, but by 2011, only 14% of them were still using it, according to a survey done by the Institute of Corporate Productivity and published by Business Insider. This represents a huge shift in the way employees are perceived in corporate culture. The most interesting factoid is that the practice was in use in Microsoft for years until it led to infighting between the employees, cutting down on productivity massively. From being one of the biggest and richest companies in the world, Microsoft has fallen down in the tech world while other, more liberal companies have surged ahead with innovations.  Thus we know that stack ranking can destroy companies and employee morale. But if you want to know more facts about this regressive practice, consult our list.


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