Amazon ditches 'rank and yank' employee review program

by HCA16 Nov 2016

Amazon.com is radically changing its employee review process that involved a “stack-ranking system” in which staff were rated against each other instead of how well they were meeting their job requirements.

An article last year in The New York Times called Amazon a “bruising workplace” in which managers said they went into annual appraisal meetings as if they were preparing to go to court. In other words, they had to amass a lot of material to justify whether an employee should stay or go.

The idea was that lowest-rated employees will regularly be let go in order to create a workplace of only highly productive employees.

However, the article was strongly contested by Amazon and a number of employees who argued it was not representative of their time at the company.

HC contacted Amazon for comment and a spokesperson provided the following response:

“We're launching a new annual review process next year that is radically simplified and focuses on our employees' strengths, not the absence of weaknesses,” said Teal Pennebaker.

“We will continue to iterate and build on the program based on what we learn from our employees.”

The changes are set to become effective in 2017, and will make Amazon the latest technology firm to do away with the stack-ranking system.

Microsoft abandoned stack rankings in 2015, while Yahoo was met with criticism when CEO Marissa Mayer attempted to introduce it.

The stack-ranking system, also known as “rank and yank,” was advocated in the 1980s by General Electric CEO Jack Welch.

In 2013, he wrote in The Wall Street Journal:

“Yes, I realise that some believe the bell-curve aspect of differentiation is ‘cruel’.

“That always strikes me as odd. We grade children in school, often as young as 9 or 10, and no one calls that cruel. But somehow adults can’t take it? Explain that one to me.”
 
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