Does the “rank-and-yank” system of measuring employees against each other boost performance? Researchers say yes it can, (I say No) as the negatives outweigh the benefits. The idea is that the “fear” of losing a job due to poor performance can help motivate employees to work harder?
I dislike that this method is rearing its ugly head again as I’d hoped this “Management by Fear” (which is what it was referred to when I was commencing my training in HR some 27 years ago) had long died off. Nope, still alive, and well! Known now as ‘rank-and-yank’ the performance review system sees employers rank their workers and “yank” or fire those who are underperforming. It is used by companies such as Yahoo, Amazon, and IBM.
Research has found that when job insecurity is extremely high, employees increased their performance and took on extra tasks. However, motivating effects were very weak and far outweighed by negative impacts on employee attitudes, organisational commitment, health, and wellbeing.
While increasing employee performance was important, job insecurity was unlikely to achieve it, the researchers said, particularly considering the low unemployment rate. Instead, employers should offer better wages, opportunities for training and career advancement, autonomy over their work, and more decision-making opportunities.