July 4, 2017

Escape from stack ranking – the GE journey

BY: Tom Lee
white curved edge

This November, TalTrack – in collaboration with Winmark, PA Consulting and GE, took a deeper dive into the business world beyond stack ranking and annual appraisals.

With the help of 20 HR Leaders and first-hand insights from GE’s own dynamic approach to workforce assessments, we identified five clear trends that businesses are following to move beyond the failures of stack ranking.

New Language

There is a shift in language taking place within HR; anything that sounds remotely like an appraisal is to be frowned at; and all terminology must have a positive undertone. Gone are the days of telling employees that they’re a ‘low-meets’ or ‘at expectation’. Employee are now ‘heros’ and on paths of growth and self-development.

Similarly, instead terming it ‘feedback’, organisations are learning to express their actions differently. One company acknowledged the conscious use of ‘insight’ in order to remove negative, backward looking connotations, and focus on the positives of learning from an experience.

More Transparency

The consensus around the room was that transparency is key for adoption. Smart companies gain early employee buy-in through involving the workforce in changes. Engaging individuals and teams in key performance management decisions and process, encourages greater openness, more active support and accelerated uptake.

Some companies are going further - using social media campaigns to seek employee suggestions, or gaining daily employee feedback on the impact and format of their appraisal. At the extreme end of the spectrum, one company placed a group of employees into a month-long, tightly monitored focus group in order to deepen its understanding and refine future HR activities.

Consistent Communications

A minority of HR leaders admitted to neglecting their communications and involvement, and that these should be higher priority going forward. This shift from stack ranking to a more engaged method of appraisal is renowned for being uncomfortable. The key learning here is to act pre-emptively with conversations and information directed to all involved. Whilst, unsurprisingly communications need to be driven by the company executives, they must also be transparent if they are to deliver the required outcome.

Take the Leap

When making the decision to ditch stack ranking, one company admitted to going ‘cold-turkey’: transitioning as rapid as possible; while another took a year to test out alternatives before deciding to abandon stack ranking entirely for 2017. The general advice from the room recommended a hybrid approach: plan, plan, and then plan some more. Then ‘go for it’- noting that planning will only ever get you so far.

Shifting Responsibilities

With the removal of forced rankings, pay and promotional decisions now come at the managers’ discretion, which requires them to take a more hands-on approach to their teams. This increased proximity provides a greater pulse of individual performance, meaning managers are better positioned to make more timely and accurate evaluations.

However, increased engagement means increasingly difficult decisions. One company experienced an issue where increased dialog prevented critical process; in turn, hindering managerial confidence and slowing appraisals. To quote Spiderman’s uncle Ben, ‘with great power comes great responsibility’. Greater flexibility requires a greater need for control, meaning HR must be both willing to trust managers and to take a back seat when driving appraisals.

In summary, when it comes to modern methods of performance appraisal, it’s impressive how many variations there are; each offering its own advantage, which works for company A but not for company B. Despite the on-going challenges, armed with five essential insights, companies can view the future of appraisals more confidently, and begin to move beyond traditional stack ranking.

About the author Tom Lee

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Tom Lee is a millennial, actively involved in developing the TalTrack performance management app, which incorporates the type of swipe-based functionality younger workforces are quite at home with.

He’d love to hear your thoughts on the future of talent management, and to know if your company has adapted its approach to performance management?