Time to Kill Forced Rankings?

HR is always a popular target, as it handles many of the least-loved aspects of corporate life. Everyone seems to think that he or she knows a better way. Add Deloitte to the list. The professional services giant is getting rid of 360s, annual reviews, and the dread forced rankings and is reinventing performance management. In this month’s Big Idea, best-selling author and consultant Marcus Buckingham and Deloitte executive Ashley Goodall describe how and why the company is making the shift. Managers now check in with their employees weekly and focus far more on potential than on past results. The goal is to “fuel” performance rather than rate it. The new approach is still a work in progress, but Deloitte believes it’s on its way to fixing a system that wasn’t doing the job. Also this month, we’re pleased to announce the 2014 HBR McKinsey Awards, given to the best articles of the year as determined by a panel of business and academic leaders with input from a readers’ advisory group. The winning article is “Profits Without Prosperity” (September), by William Lazonick, a professor of economics at the University of Massachusetts Lowell and a codirector of its Center for Industrial Competitiveness. The author describes the damaging effects of stock buybacks, arguing that they undermine income equality, job stability, and growth, and mostly serve the interests of executives, whose compensation is often heavily based on stock. Our finalists represent the range of topics we cover. Stefan Thomke and Jim Manzi are honored for “The Discipline of Business Experimentation” (December), Tarun Khanna for “Contextual Intelligence” (September), and Ethan Bernstein for “The Transparency Trap” (October).

Time to Kill Forced Rankings?

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