Effects of Forced Ranking on Team Trust

THE BELL CURVE IS BACK. Because nothing says “modern talent strategy” like recycling a 1980s blunt instrument. Rank your managers on a forced distribution, lop off the “bottom 10%,” and voilà — instant performance! (And, coincidentally, a tidy cap on bonus payouts.) It sounds efficient. It looks rigorous. Boards like it because it feels like discipline. Investors like it because costs stay predictable. But here’s the problem: the Bell Curve assumes performance is an individual trait, neatly distributed like height. It pays no attention to system dynamics. Which means you might be “yanking” not your weakest talent, but the people stuck in the most dysfunctional corners of the system. And you might be rewarding the “top 10%” not for brilliance, but for being shielded from complexity. Meanwhile, collaboration erodes. Managers stop sharing talent, hoard information, and quietly sabotage peers — because your system told them: only so many of us get to survive. Yes, Rank-and-Yank controls the bonus pool. But it comes at a different cost: trust, collaboration, and leadership effectiveness. If the way you run the system creates toxicity, no amount of star-polishing or pruning will save it. --- Reflection Prompts: Performing in a Forced Ranking System Self: How would I react if my performance was judged relative to peers rather than the realities of my work? Role: In a forced ranking system, would I prioritise collaboration or self-protection in how I lead my team? System: What hidden costs might emerge for the organisation when performance is reduced to a curve instead of context?

Every time a company turns promotion into a contest, you see the same fallout: - People stop sharing knowledge - Trust drops fast - Quiet contributors disappear into the background - Teams freeze instead of move faster You don’t build excellence through forced competition. Here’s what actually happens: → One “winner” gets a new title and pay bump → Everyone else wonders if their effort matters → Even your top people start asking, “Why bother?” Want to know how great teams pick leaders? • They make what it takes to move up clear (no guessing games) • They give credit for helping others, not just hitting numbers • They share honest feedback so everyone can get better • They don’t play favorites behind closed doors Promotions should reward the ones who lift the team up—not the ones who step on others to get ahead. Forced ranking kills trust, not just engagement. Your best people notice. They don’t stick around to see if things change. Reward those who build others, not just themselves. Promotions signal what you value. How has recognition shaped the culture in your team? What would you change?

The first quarter just ended. Did you fire enough people? Cut the bottom 10%. Stay lean. Drive performance. I once believed in this style of management—“rank & yank.” It felt efficient, it is easy to implement, and it’s “decisive.” It creates urgency and makes people work harder. But it's destructive. It kills morale, erodes trust, and fuels fear-based work. This isn’t just my opinion, the data confirms it: productivity suffers, engagement drops, and retention tanks when employees feel as though they are always one bad quarter away from the chopping block. The more effective path is to actually lead. To give your team continuous, specific feedback. To invest in 360 reviews, clear goals, and growth plans. To coach instead of arbitrarily cut. This requires time, judgment, and courage, but most orgs that rely on stack ranking don’t reward those things. They reward compliance with a spreadsheet. They reward “Force the curve. Yank the bottom.” When I was at Amazon, they tried to implement a more coaching-based system, but managers weren't trained to coach. As a result, feedback was watered down and the whole system was lackluster. Without structure, the system collapsed. So, Amazon returned to stack ranking. Not because it was better—because it was familiar. But familiarity doesn’t equal effectiveness. For stable organizations where growth has leveled and talent is harder to replace, the “rank & yank” model is not just outdated. It’s wasteful. Hiring great people is expensive, onboarding them is slow, and losing them is a hit to your culture, momentum, and institutional memory. If you're serious about performance, you need to invest in your people. And if you're still proudly cutting the bottom 10% each quarter... Ask yourself if you're growing a team or just keeping a revolving door spinning.

Return of the "Mortality Curve" The infamous instrument pioneered by Jack Welch at GE—internally dubbed the Mortality Curve—is making its way back under the guise of "forced ranking." It seems the narrative is shifting: we’ve apparently "cuddled enough," and now we need "real performance" again, which translates to clamping down hard on so-called underperformers. Latest revival? Meta. Ironically, the company now named after a product that never quite connected with real customers. (Hint: Maybe, just maybe, this is more of a strategy failure than one of "low performers.") Here’s what the boss of this company, recently dubbed a sentient being without a spine, has to say: "Meta is working on building some of the most important technologies in the world — AI, glasses as the next computing platform, and the future of social media. This is going to be an intense year, and I want to make sure we have the best people on our teams. I've decided to raise the bar on performance management and move out low-performers faster. We typically manage out people who aren't meeting expectations over the course of a year, but now we're going to do more extensive performance-based cuts during this cycle — with the intention of backfilling these roles in 2025." Let’s pause here and remember what the evidence (and the inevitable backlash) will tell us when the pendulum swings back again: 🥅 Performance in companies doesn’t follow a normal distribution curve. Not in teams, not in departments, not anywhere. 🥅 Performance evaluation is inherently biased. Especially in knowledge work and team settings where success depends on collaboration and creativity. Some even argue it’s broken beyond repair—for now. 🥅 Forced ranking creates short-term fear, not sustained results. It may work temporarily in non-competitive cultures, but it quickly spirals into cutthroat dynamics. 🥅 It attracts the wrong people. Hawks thrive in forced ranking systems, creating a vicious cycle that destroys trust and cohesion. 🥅 It’s a long-term talent drain. Dismissing the "less smart" or "underperformers" in a time of talent scarcity—particularly as immigration pipelines dry up—is downright shortsighted. Performance is important. But it’s not about fear, or punishment, or simplistic cuts. True performance comes from looking deeper: understanding slumps, addressing root causes, and unlocking the collective potential of your teams. Because in the end, what matters most is not individual brilliance—it’s the strength of the whole.

The Unwritten Rule Fueling Stack Ranking's Revival: Toxic Individualism Is Sabotaging Your Organization Stack ranking isn't just a performance management system—it's a symptom of toxic individualism that's quietly expected in workplace cultures (even the ones with "teamwork" on their values page). As an industrial-organizational psychologist researching the unwritten rules of work, I've identified toxic individualism as one of the most destructive forces in modern organizations. Stack ranking is a quite visible manifestation. When companies force-rank employees and eliminate the "bottom" performers regardless of their actual contributions, they're not just evaluating workers—they're fundamentally reshaping culture. As @Reworked recently reported, this approach rewards competition over collaboration, with predetermined percentages of workers labeled as underperformers even when they meet expectations. My research reveals that toxic individualism disproportionately harms employees from collectivist cultural backgrounds—working-class cultures; Latin American, Asian, and African communities; and women (who are expected to be more communal within their race and class strata). These groups value cooperation over competition. It's no coincidence that @Microsoft abandoned stack ranking after losing 50% of its market cap when employees became more focused on outperforming colleagues than actual innovation. So...why is it back again 11 years later? Organizations adopting stack ranking are telling employees: "Your success depends on others' failure." This unwritten rule transforms potential collaborators into competitors for survival, creating a culture where knowledge becomes currency hoarded rather than shared. Is your organization suffering from toxic individualism? I help companies identify and dismantle these unwritten rules that sabotage team performance, psychological safety, and ultimately, business results. #unwrittenrules #workingclass #culture #leadershipdevelopment

“What if performance reviews didn’t feel like a test?” When Satya Nadella took over as CEO of Microsoft in 2014, he quickly realized something wasn’t working. The company had long relied on annual performance reviews and forced ranking systems. But this approach wasn’t just outdated—it was harming Microsoft’s culture. Employees felt like they were in a constant race, competing against their colleagues rather than collaborating. Their focus was on the ranking - not growth. Innovation slowed, feedback was sparse, and morale was low. Nadella had a powerful vision. He wanted to turn performance management from a dreaded annual ritual into an ongoing journey of learning and growth. 💡 The Shift: Performance as a Conversation, Not a Score - Instead of continuing with a system that created silos and stifled collaboration, Microsoft abolished forced rankings and replaced them with continuous feedback. - The focus was no longer on who was “better” than whom. The focus became on how each person could grow and contribute to something bigger. 🚀 The New Approach: Empowering Growth 1. Continuous Feedback: - Managers no longer waited for an annual review to give feedback. - They were encouraged to engage in regular, meaningful conversations with their team members—celebrating wins, identifying challenges, and fostering development. 2. A Growth Mindset - Nadella instilled the idea that failure is part of the process. - Employees were encouraged to embrace challenges, learn from mistakes, and always strive for improvement. 3. Development, Not Ranking - Gone were the days of pitting employees against each other with rankings. - Instead, each person was evaluated based on their unique contributions and development. - The goal was clear: growth and learning. 🔑 The Impact: - Collaboration blossomed. Employees began to share ideas, resources, and insights instead of hoarding them for their own benefit. - Engagement levels rose as employees felt more supported and heard. - Innovation accelerated, as people felt empowered to take risks and think outside the box without the fear of being judged or ranked. One employee summed it up perfectly: "I used to fear performance reviews. Now, it feels like I’m supported, guided, and encouraged to grow—not just scored.” 🔁 The Takeaway Microsoft’s transformation in performance management wasn’t just about changing a process. It was about shifting the culture. 🧭 "Performance isn’t about getting a score once a year. It’s about growing every day -in small, continuous ways" 🧭 As leaders, we need to ask ourselves: " Are we creating systems that help people grow? Or are we focused on judging them? PS: I’m Anson Mathews, founder of The Clarity Catalyst. I help leaders cut through complexity to build agile organizations and future-ready workforce. Follow me for clear, actionable thinking on 'how to build stronger organizations'.

Rank and yank is back. Maybe it will work this time? Probably not. Forced ranking performance management creates internal competition, undermines collaboration, and fails at its most basic job: helping people get better at their work. Meta doubled down on forced ranking systems -- requiring managers to grade 15-20% of employees as "below expectations." They're not alone. Look back to the '90s and '00s you'll find that forced rankings were a big part of Microsoft's "lost decade." Research on them and GE shows they: 🔴 Created internal competition that destroyed collaboration 🔴 Drove higher turnover among top performers Worse still, 62% of performance ratings reflect the rater's biases, not actual performance. Ashley Goodall: "Ratings reveal more about the rater than they do about the ratee." Ashley led radical overhauls at Deloitte and Cisco that: ✅ Separated performance management from compensation. "Compensation dollars are zero sum. Ratings just pretend to be zero sum, and the pretendness is what annoys people." ✅ Moved to future-focused conversations. Would I always want this person on my team? Is this person at risk for low performance? Is this person ready for a promotion today? ✅ Made weekly 1:1s a habit. Some CEOs may want them gone, but weekly 1:1s boosted engagement 13-16% and in tests had massive positive impact on Sales teams results. Investing in employees pays off. Think there's no alternative to the annual / bi-annual perf process? We can do better! 👉 Read on: https://lnkd.in/gXStfJBq #FutureOfWork #Performance #Leadership

I'm clearly in favor of performance review ratings (as opposed to no rating at all) in performance reviews. ⤵️ I'm also in favor of monitoring the distribution and getting it close to a bell curve overall. ⚠️ However, forcing managers of smaller teams to apply it is hugely counterproductive and, frankly, misguided ⚠️ Downgrading the rating of a performing employee (and forcing the manager to choose someone) breaks the trust between employees and companies (effort ➡️ recognition). It will inevitably lead to disengagement and turnover. This is Goodhart's Law at play ("When a measure becomes a target, it ceases to be a good measure."). 👉 It's a good KPI to monitor with a large enough sample size (50+ or so?), but it makes zero sense to apply it to teams of 5-10 persons.

Bell Curve or Beyond the Curve? Organizations today are increasingly reconsidering traditional bell curve calibrations in favor of more flexible and individualized performance management approaches. Continuous feedback, transparent communication, and a focus on employee development are emerging as alternatives to address the controversies associated with bell curve evaluations such as but not limited to: 1. Forced rankings not accurately reflecting individual contributions and can lead to arbitrary distinctions among employees. 2. Not recognizing individual achievements, potentially leading to demotivation. 3. Fostering a competitive environment among team members as they vie for limited top ratings, which may in turn hinder collaboration and teamwork, as employees may prioritize individual success over collective goals. 4. Disproportionately influenced if there are biases related to gender, race, or other demographic factors. 5. Causing fear of receiving lower ratings, even for strong performance, can create a culture of anxiety and job insecurity. 6. Not adequately differentiating between high-performing employees, as a significant portion may be clustered in the middle of the distribution. This limitation can impact reward and recognition strategies. 7. Erode trust between employees and management. When employees perceive the evaluation process as arbitrary or lacking transparency, it can lead to a breakdown in trust and a negative organizational culture. Whether employing a bell curve or not, the paramount consideration should be the adoption of a fair and comprehensive approach to performance management. This leads to the employee success, and ultimately, the Company’s at large. #performancemanagement #employeeexperience #development #bellcurve #evaluation

Constantly comparing employees is toxic. It doesn’t push people to grow—it crushes them. When workers are always ranked against each other, they stop believing in their own worth. Confidence is shattered, and instead of feeling valued, they feel like they’re one step away from being replaced. This kind of environment breeds cutthroat competition. Employees stop helping each other and start guarding their work, creating silos of mistrust. Teams fall apart, and collaboration disappears because everyone is too busy looking over their shoulder, trying to outperform the person next to them. The worst part? It feels deeply unfair. When performance measures are unclear or biased, it builds resentment. People start thinking their hard work won’t be recognized, and soon they stop caring altogether. If companies want real growth, they need to ditch the toxic comparison game. Focus on individual progress, provide honest feedback, and promote teamwork. Only then can organizations build a workplace where people actually want to stay, contribute, and thrive. #ToxicWorkplace #EmployeeWellbeing #GrowthOverComparison #StopToxicCulture #WorkplaceMentalHealth #CollaborateDontCompete #FairEvaluation #SupportAndGrow #TeamworkMatters #HealthyWorkCulture #EmployeeGrowth #HonestFeedback #BreakTheCycle #WorkplaceTrust #DitchTheComparison