• When Is a Layoff Not a Layoff?

    By • Jun 26th, 2007 • Category: Pure Content

    When it comes in conjunction with the annual review process and the excuse is the process of “forced ranking”.

    “Forced ranking” is the practice of putting some at the bottom of the performance pile every year, suddenly, even though they’ve often had no warning and even though prior performance ratings were above average in the past.

    This idea of a bell curve in distribution of performance rankings for a group, I think, originated with GE. In this theory, only so many can be high performers, the majority are average and there are always a percentage of people who are poor performers. That’s just the way the cookie crumbles…

    Those at the bottom of the rankings are shoved out, those in the middle sit still or have to develop a strategy to displace someone at the top in order to move up and those at the top are vulnerable to any misstep, of their making or not, which puts them at any point in time at a disadvantage to their peers.

    But I think forced ranking is really a just a way to disguise reductions in force (redundancies) without having to admit you have to cut to stay where you want to be profit-wise. How do you make an otherwise self-respecting, valued person suddenly feel like a loser? Tell them that, it’s nothing personal, but they just ended up at the bottom of the “forced ranking”. That is, compared to their peers, they don’t have the right stuff right now and their performance, although fine, is not as fine as the other 90%. So, with a poor rating instead of a positive rating, your choices are slim. No raise, no bonus, no ability to transfer, and a less enviable position at the negotiating table as far as a severance package when you do finally realize you have to leave. Oh, and don’t forget, with a poor rating on your record, there’s no rehire…

    And how did this rating come to be? The process is less than transparent at some firms and is aimed at providing cover for and abdication of responsibility by any one partner by allowing all decision to be blamed on the “Committee.” Do you have a choice? Not really. With new online and automated processes at some firms, there isn’t even the old signing of the review to signify acknowledgement and acceptance or rebuttal to signify disagreement. It just is, in the way that the Committee has decided it should be. Your only option is to fight and make yourself more of a pariah in the firm or sue and make yourself more of a pariah out of it.

    With the right gender, race or age, you may garner some leverage. After all you can always sue or file a discrimination claim. But who will testify on your behalf? Your colleagues who still want to see a light at the end of the tunnel in payment for all of their loyalty and long hours? Not. The partners who took part in the decision or the one that drove the decision? Catch them if you can.

    One thing for sure. The standards for achieving success in a Big 4 firm are pretty clear. Conformance, Competence, Collegiality, and Chargeability. If you see that your case always needs explaining or propping up, best to move on while the choice is yours not theirs.

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    5 Responses »

    1. Enron, of course, did exactly this, which encouraged overreaching…?

    2. Recently an insurance company nearly wind up….

      A bank is nearly bankrupt……

      Who fault?

      The top management of the Public listed company ( belong to “public” ) salary should be tied a portion of it to the shares price ( IPO or ave 5 years )…. so when the shares price drop, it don’t just penalise the investors, but those who don’t take care of the company…..If this rule is pass on, without any need of further regulation, all industries ( as long as it is public listed ) will be self regulated……

      Sign a petition to your favourite president candidate, congress member again and ask for their views to comment on this, and what regulations they are going to raise for implementation…..If you agree on my point, please share with many people as possible….

      http://remindmyselfinstock.blogspot.com/

    3. […] work in the Big 4.   Please check back later today. In the meantime, for more information about “forced ranking,” the “performance review process” at PwC, and the theory of layoffs in professional […]

    4. […] don’t have any animosity for any of the firms, except for maybe a little for PwC. I worked there most recently and (although I met some great people) the (mixed) experience is what […]

    5. […] the legacy of Jack Welch, GE’s insidious influence on how people all over the corporate world are measured and rewarded, and their history as a bad actor when it comes to internal controls and accounting […]

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