When I worked for a different university I received a surprise late on a Friday afternoon. The head of psychology distributed a list ranking each faculty member separately on research, teaching, and service achievements for the year. He then quickly left the building. He later told me that the dean made him do it — why, I don’t know.

Perhaps following a common self-serving bias of thinking myself better than average in every regard, I felt astonished by my rankings that were not at or near the top — I wondered what he could have been thinking. The rankings served no good purpose that I could see, and I suspect almost everyone in the department responded with disbelief and resentment.

Last week I read about a similar management mistake made by a larger, more sophisticated organization: Microsoft. Every year every Microsoft employee receives a ranking within his or her work group, with highly ranked individuals received bonuses and other rewards and consistently lower ranking employees eventually shown the door. For more about the system, see:

http://www.slate.com/blogs/future_tense/2013/08/23/stack_ranking_steve_ballmer_s_employee_evaluation_system_and_microsoft_s.html

The ranking system has led to widespread demoralization and to other unintended effects. Employees started pretending to cooperate with others while withholding key information that could have helped the others do well at work, perhaps earning rankings higher than that of the person withholding the information. Feelings of envy and resentment pervaded the workforce. Good employees left to escape the pressure and unpleasantness.

What were the psychological mistakes of this management system? From the perspective of reinforcement theory, one can see the folly of operating a system that creates many losers for each winner, that tells employees who had a great year that someone else did better, and that provides an incentive to sabotage fellow workers rather than to assist them. Throw in the common problem of making subjective judgments about employee performance levels, and the system is a recipe for organizational disaster.

What would be a more sensible system? Rewarding teams and large units would encourage cooperation and group achievement. Rewarding groups and individuals for good performance (rather than performance better than that of someone else) would encourage good performance and not competition, because everyone could win. Basing recognition and other rewards mostly on objective measures would help minimize bad feelings about managers merely rewarding their cronies.

Do you have a reinforcement scheme where you work? How does it operate? Does it help motivate employees to produce? Does it have unintended bad effects?

John Malouff, PhD, JD
Assoc Prof of Psychology