The past few years have seen a considerable change in the use of relative performance system. As can be seen from the attached newspaper, some companies have recently eliminated it while others are still using it. Yet, there remains some disagreement as to whether the overall effect of this tool has been appropriate or inappropriate to evaluate employee’s performance. While there are certainly valid arguments to the contrary, I would argue that the using of “stack ranking” system has a great amount of advantages as well as associated downturns. These impacts can vary along with different point of views in organization. In this essay, from the manager’s perspective, I aim to identify the pros & cons of “stack ranking employee performance rating”.

Firstly, It is indisputable fact the “stack ranking” is a good tool in order to eliminate grade creep and retain the best performers. Literally, the “absolute ranking” may give the fake ratings resulted in an inaccurate performance evaluation due to the fact that most employees are commonly given the same rates or grades. On the other hand, “stack raking” system helps manager to compare employee’s performance, to emphasize high and low performers followed by the accurate ratings. This evaluation tool will avoid nepotisms and favoritism that are not associated with actual performance. More importantly, this kind of performance evaluation also enables manager to highlight high performer and keep an eye on them in order to take proactive steeps such as high compensation or development chances to avoid their separation. However, high-performer may not help their colleges by sharing their knowledge due to the fact that they want to stay on top.

Secondly and more importantly, this evaluation method will helps the manager to deal with low performer in order to promote growths due to the fact that under-performers can have more chances to acknowledge the gaps and improve their performance through training. Through stack and rank system, manager can address who had the low result and he can coach or monitor them to meet the expectation. Equally important, if the performances do not change in an effective way, under-performer can be separated without any doubt. However, the lowest performer might not be that much lower than the highest and it may result in wrong termination of the organization.

Thirdly, it also improves the communication between managers and the staff though periodic performance evaluation. However, when staffs have impact over the average of his reference group, the action forms can be sabotage and collusion. Moreover, if the indicators or the metrics for performance are not clear, or communicated ineffectively, real performance may not be truly reflected in a proper final ranking.

Fourthly, it is undeniable the fact that this technique is inexpensive and relatively easy for manager to compare performances between employees. However, the use of “stack and rank” technique may create lower productivity, inequity or even skepticism. It also results in the decrease in the engagement of employee, their collaboration and the morale in general.

All in all, I believe it is a mistake to evaluate this type of technique if we base our view on only one side. By way of conclusion, from the manager’s perspective,I once again reaffirm that each evaluation technique has their own bright sides as well as dark sides. “How to use it appropriately and how to eliminate the downturn as much as possible” depends on specific industry and company’s culture and strategy.

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