Stack ranking has to be, by far, one of the stupidest management methodologies that I have ever heard of.
It indicates 4 things:
1: Your hiring isn't up to scratch such that this needs to be done (i.e. rank and yank). Raise the hiring bar and reduce firings.
2: You don't trust your employees to do the work you hired them too - this breeds mistrust and increases the level of politics used in the work force. You need to let creative employees freely do what you pay them to do.
3: You don't give projects enough time to mature.
4: You allow randomeness and false causation to determine employee outcomes. For example AIG Finance was completely ripping the other departments during the bubble run up. But come the crash - they almost took the entire firm down.
It indicates 4 things:
1: Your hiring isn't up to scratch such that this needs to be done (i.e. rank and yank). Raise the hiring bar and reduce firings.
2: You don't trust your employees to do the work you hired them too - this breeds mistrust and increases the level of politics used in the work force. You need to let creative employees freely do what you pay them to do.
3: You don't give projects enough time to mature.
4: You allow randomeness and false causation to determine employee outcomes. For example AIG Finance was completely ripping the other departments during the bubble run up. But come the crash - they almost took the entire firm down.