The end of the year means bonuses for some, and firing for others. The introduction of forced ranking, where employees must be graded on a curve, with top performers promoted and bottom ones fired, in some Chinese companies has been accompanied by controversy since the very beginning. As the end of 2012 is approaching, how has this method affected Chinese white collar workers? Is it a worthwhile technique? Three authors shared their opinions with the Global Times.
New employees deserve brutally honest evaluation
By Feng Yu
Year-end reports and evaluation should never be regarded as an empty routine. Both employers and employees need to make new decisions for the next year based on the performances and result of the previous year.
Forced ranking is a good solution in a transparent and established system although it's a controversial HR management practice. But the precondition is that all the comparisons are conducted at the same level. It's unfair to put a rookie and a veteran on the same scale. For example, new graduates shouldn't be put into the same basket with colleagues who have been in the company or the industry for more than 10 years.
So if people fail in an environment of fair competition, they shouldn't complain about other factors but find the problems within themselves. Giving up a failed career early is the best choice.
While many stress the negative effects on the hurt dignity on the bottom 5 or 10 percent employees, the long-term positive impact on the employees should also be highlighted. The proverb says "Without destruction there can be no construction." Dignity can be established upon new achievements in a new career.
Forced ranking helps people find out earlier and better about their suitability within a company, or even an industry. The ranking is cruel but so long as it's rational, it just lets us be aware of the reality that we are inferior to others in this field.
Competition is fierce and time is always limited. If people can't perform well in a company compared with other colleagues, they should consider whether it's necessary to stay there to get used to the environment.
The company won't change because of you but you have to make adjustments to survive in the company. If the process takes too much time, you should consider whether it's worth waiting, let alone the possibility that you will still fail even after more time and effort.
Companies that apply the forced ranking system shouldn't be blamed blindly. The market-oriented economy forces all the enterprises to be profit-driven. Any company that wants to survive has to be competitive. If it is lenient to its staff, this will boomerang back on it one day.
To be tough is one principle of survival of the fittest. This principle applies to both the company and the employees.
The author is an editor with the Global Times. firstname.lastname@example.org
Arrogance ruins chance to clear out old deadwood
By James Palmer
Even in the West, forced ranking is a controversial practice. Although pioneered by business guru Jack Welch at GE, it was also used at criminal firms such as Enron, where it helped create the succeed-at-any-cost culture that hurt millions of people. Microsoft, whose corporate culture has been described by former employees as "abusive," is another exponent of what it calls "stack ranking." It often creates artificial stress, damaging personal lives.
But there are advantages to the system. It forces managers to think clearly about who is and isn't contributing, rather than carrying weak employees. It can help break the Peter Principle, that people in a hierarchy "rise to the level of their incompetence," since competent workers are promoted but it takes severe incompetence, not just routine mediocrity, to be fired. This would certainly be a boon to Chinese SOEs, where some employees do little work.
Chinese firms, however, already suffer from an approach to management that is both falsely technocratic and deeply dysfunctional. Many firms require managers to fill in constant forms about employees, ranking individual pieces of work, creating constant time sheets, and attempting to systematize the evaluation process. This Taylorist approach was supposed to make things more effective, but merely made them more petty, creating artificial workload and greater bureaucracy. If forced ranking circumvented this, and was instead a simple and general annual review, it might be good for Chinese firms.
But in practice, it's been yet another set of forms. And on top of that, it exacerbates existing problems in Chinese office culture. Chinese managers are arrogant, as has been much in evidence recently in job-hunting reality shows. High unemployment and the absence of real unions mean workers are in a weak position and have little recourse in the event of unfair dismissal.
Present-day China is a deeply nepotistic society, one in which guanxi, connections, often matters far more than talent. Even within institutions, cliques develop fast, and there's often an atmosphere of backstabbing and distrust. Managers have a strong tendency to play favorites, and to back their own trusted people even if they're outright incompetent. Forced ranking is therefore not a credible system, since employees have little trust in the abilities of their managers to judge fairly.
The author is an editor with the Global Times. email@example.com
False competition ends up damaging performance
By Li Haihong
In companies, underperformers are often eliminated during annual review. This used to be a common technique. However, nowadays it needs improvement or even to be abandoned altogether. Let's look at on the two sides involved, the company and the employees.
For employees, they get sacked when the management thinks they are underperforming. But how can we correctly evaluate people's performance?
There is considerable personal bias involved in practice. And some key performance indicators (KPI) which are used for performance evaluation are out of date. Furthermore, the simple elimination method is not necessarily good for company business.
Take one phone shop that used to review sales staff's performance monthly, using sales as their main KPI. Staff who made the least sales got laid off. However, management later found out this kind of elimination did not increase the total sales in the shop. Instead it led to the fierce competition and intense relationships among sales staff, who forced themselves on customers to try and steal the sale before their colleagues could. This made customers feel annoyed, and tarnished the whole shopping experience. After serious analysis of the situation, management decided to abandon the simple elimination system.
For the company, the simple elimination system makes management arrogant. They feel they have the power in hand and they are always on the right. Actually, the concept of management is improving all the time. In modern enterprises, leadership should come before management. Under this idea of leadership, there are no unqualified employees, but leaders can find the right place for each of them. This is the responsibility of a modern leader, who should not escape from this.
With the ongoing development of modern business models, the relationship between the employers and employees is no longer like before. Employers and employees are co-workers together for the same goal. The employers have the responsibility to help employees better realize their value, and the employees can make full use of their talent and improve with the companies.
The author is a white-collar worker based in Shanghai. firstname.lastname@example.org