Marissa Mayer, CEO of Yahoo, has been the subject of several news stories since her promotion to the role in July 
2012.
In February this year, she caused a stir when she banned employees from working at home, claiming that ‘people are more productive when they’re alone, but they’re more collaborative and innovative when they’re together. Some of the best ideas come from pulling two different ideas together.’
Mayer has hit the headlines again recently with another HR disaster – it was revealed that the company uses stack ranking to rate the performance of company employees.
If you’ve never heard of stack ranking before, we’ll catch you up. Stack ranking is a performance model that involves each manager and department in an organisation having to rank their employees. Starting with the top performers, each department must give a percentage of top performing employees, and rank downwards to the lowest performing individuals. It’s a process that has been tried and tested by many organisations, including Microsoft. The company ditched their stack ranking efforts last year, with many employees describing stack ranking as ‘the single most destructive process inside of Microsoft.’
So why has Mayer decided that stack ranking is the way forward, when it was seemingly disastrous for Microsoft?
Stack ranking is a risky move for any organisation. For starters, ranking employees negatively and highlighting their faults doesn’t create a more productive workplace. In fact, we’ve found that it has the opposite effect – one of the keys of positive psychology, a discipline that is applied to our work at People Lab, is the notion that employees need to be happy at work before they can succeed – and not the other way around. How can an employee be happy in their work, knowing they’re in the firing line?
It’s also a bad move where morale and team work are concerned. A stack ranking process typically involves rewards for those at the top, and nothing but a disciplinary (or sometimes a dismissal) for those at the bottom. This only serves to cause friction between colleagues, and will alienate employees from each other.
The process can have a dramatic impact on employee confidence – feeling that you’re being monitored five days of the week must be completely maddening, and certainly wouldn’t engage me.
At People Lab, we’re passionate about employee engagement. All of our work is grounded in positive psychology, and we truly believe in the power of happiness at work. We don’t see employee engagement as a tick box activity – and we certainly don’t think employees are numbers on a scale, that should be flushed out if they’re not performing as well as everyone else. Employees in every organisation have individual needs, and an individual list of things that they each need to be engaged. Rating employees on a scale won’t suddenly improve work performance, or even give you something to work with – all it reveals is that you’re not doing a very good job at ensuring your employees are engaged and happy at work.
