Yahoo embraces bell curve ranking

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A new policy at Yahoo! sees managers ranking their employees on a bell curve and terminating those at the low end.

While CEO Marissa Mayer may have told media that the rankings aren’t mandatory, employees have said otherwise, Bloomberg Businessweek reported.

Bell curve rankings became popular in the 1980s, but have declined recently amidst a growing understanding within HR circles of not only its unpopularity with staff, but the disadvantage it provides to organizations where all have achieved strong performance.

The constant pressure of a bell curve ranking was found to demoralize staff, the Massachusetts Institute of Technology report, Punishing by Rewards: When the Performance Bell-curve Stops Working For You, revealed.

Although a certain degree of pressure can help motivate a workforce, bell curve rankings are apocalyptic in nature: the report found that, over time, the employee base is thinned out through the culling of staff on the low end of the curve.

With every review, more staff – even those performing well – will be terminated, as the bell curve will always place some in the lower portion. Effectively, once all under-performing staff are eliminated, average staff will begin to be, as well.

“As the company shrinks, the rigid distribution of the bell-curve forces managers to label a high performer as a mediocre,” the report stated. “A high performer, unmotivated by such artificial demotion, behaves like a mediocre.”

  • HCJ on 1/17/2014 12:02:02 PM

    “A high performer, unmotivated by such artificial demotion, behaves like a mediocre.” DUH!!! Employees could have told management this years ago when the bell curve or stacking system began. Seems to me Ms Mayer is doing a lot to demoralize Yahoo from within. Maybe that is why Google is the #1 company to work for and Yahoo is not.

  • REP on 1/20/2014 3:14:09 PM

    Wow, first they ban telecommuting, now they'e moving to stack ranking. Nice 1-2 punch to demoralize employees and chip away at the culture. I'll look forward to future articles on how the current CEO ruined Yahoo.

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