Relegation fear works on the pitch but not in the office

"I have won a lot of promotions and been at Wembley and won the play-offs, [but] I think, individually, this was the biggest result." If you follow sport at all, you get used to hyperbole. But this recent comment by Steve Evans, who manages the Rotherham United football team, stood out.

He had not won a big trophy or made it to the top of the league. He was celebrating success in a struggle to avoid relegation from English football's second tier. In effect, Rotherham were euphoric about having survived the world's biggest annual festival of forced ranking.

In forced ranking systems - also known as "rank and yank" or "stack ranking" - a set number or percentage of the worst performing members of a group are put on notice of possible demotion or dismissal after an assessment. Such approaches are the toxic byproduct of performance reviews. I happen to think regular reviews are essential and useful, for both appraiser and appraised, if done well. But plenty of people disagree. The lingering dominion of forced ranking is one reason why.

The wild scenes at the end of every football season are a clue to what is wrong with forced ranking. Yes, the joy of the promoted is great to see, and it is hard not to sympathise with the distress of the relegated. But there are darker feelings in play, too.

When Brazil tried to introduce a European-style league system, with relegation and promotion, in 2006, it spread doubts among fans about the motives of some football teams in the final decisive matches, the quality of refereeing, and the legitimacy of the whole competition. In 2009, fans of Coritiba tore apart the stadium amid violent scenes after their team was relegated. Mr Evans himself used his moment of relief to pour scorn on a player from one of Rotherham's relegated rivals who had wished the team ill before their decisive match.

You would hardly expect two rival groups of players to co-operate, but within a large organisation, where everyone's interests are supposed to be aligned, such emotions are poisonous. Infighting between staff, horse-trading before any review, and incentives to lazy recruitment and short-termism are well-documented. Yahoo's quarterly performance reviews, introduced by Marissa Mayer when she became chief executive, provide the highest-profile recent example of the turbulence created by ranking. Yahoo - which puts employees in one of five "buckets", from "greatly exceeded" goals, down to "missed" targets - says its system is not a stack rank. But according to Nicholas Carlson's recent book, the effects were the same. One staff member asked, in an anonymous question-and-answer session: "Why would I help out my fellow designers, or other teams, or share an opportunity when I can just gather them up myself to ensure my job?"

Elsewhere, there are signs of reform. Microsoft has moved away from a stack ranking system that was condemned in a 2012 Vanity Fair article. General Electric, under Jack Welch, was the best-known example of a company that insisted on replacing annually the bottom 10 per cent on what Mr Welch called a "vitality curve". That system has gone at GE, even if its best-known proponent is still advocating it. In his latest book, The Real Life MBA , written with wife Suzy, the former GE chief executive says ranking - he calls it "differentiation" - is the "embodiment of truth-and-trust leadership". He dismisses its critics as "rabid".

The determined efforts of sports teams facing demotion seems to suggest differentiation can "unleash wow", to quote the Welchs. End-of-season matches with simple issues of survival at stake certainly entertain the crowds. It is also important to find ways to stiffen staff reviews, which are often burdened by bureaucracy and enfeebled by managers' inability to give clear feedback to weaker staff.

As the perfectionist music teacher in the recent film Whiplash tells a promising jazz drummer: "There are no two words in the English language more harmful than 'good job'."

But this teacher is shown to be a capricious bully, who pushes players to the brink by forcing them to compete for a place in his band. At work, tests have shown that fear shuts down our ability to absorb information passed on in a career appraisal and undermines long-term performance. Forced ranking may motivate footballers but - forgive me if I froth at the mouth a little here - it is quite the worst way of getting the best out of your staff.

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Twitter: @andrewtghill

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