“My employer engages in a process called ‘forced ranking,’ which was used to give me my first negative review in 10 years, and deny me severance. Anything I can do?”

Question: Alan, I have been with a company for almost 10 years with good reviews. My most recent 2009 review was favorably written, however, I was ranked – compared to my peers – as “Needs Improvement,” and for this reason was placed on a Performance Improvement Plan (“PIP”).

It is interesting to note that my department is outsourcing to India soon and this ranking may disqualify me from receiving a severance package. I did contest the ranking with Employee Relations, on the grounds that it was a forced ranking, to no avail.

Younger, less experienced employees were given better rankings than I was. I am 44 years old. Would I have a case on the grounds that for 9 years I had good reviews until they decided to outsource? Thanks.

        Lynn, Massachusetts

Answer:  Steve, I think yours is the first question ever submitted to our blog about “Forced Ranking,” a management practice that I find abhorrent. When “Forced Ranking” leads to Performance Improvement Plans, or “PIP’s” as they are called, and then used to deny severance, I have only one phrase that I think describes that combination: “Pure Evil.” Forced Ranking was made popular by Jack Welch, former CEO of GE, who I understand thought it was just a great idea. Lucky for him, I don’t think it was ever applied to him. 

This is how “Forced Ranking” works: Everyone must be reviewed and given a score. After that, a certain percentage of people must be terminated – no matter how good they were – on the basis of their “ranking.” So, even if everyone was excellent and wonderful, those who were a bit less excellent and wonderful – even though they were excellent and wonderful – must be laid off.

As an example, let’s say there are 100 employees in the company. Everyone’s performance is assessed. Let’s say 90 of the employees were considered “outstanding,” 5 were considered “excellent,” and 5 others were considered “wonderful.” Now let’s suppose ten people have to be cut. Due to “Forced Ranking,” the 10 employees who were “excellent” and “wonderful” must be laid off, even though they were, in fact, “excellent” and “wonderful.”

(By the way, Forced Ranking is known to make some employees try to sabotage the work of their colleagues; it definitely does not pay to help out a buddy.)

When an employer uses “Performance Improvement Plans” in this process, it is saying, “Even though you are ‘excellent’ and ‘wonderful’ your performance is not good enough.” It is denigrating, it is humiliating, and it is infuriating. More than anything, it is dishonest and fraudulent. In no language on this earth does “excellent work” mean “poor performance,” not even close. It is a ruse, a fraud, a sham, and those who do such things are dishonest and should be shamed for doing so.

Why were you chosen to be treated this way? It might be your age. Then, again, perhaps you are paid a bit more. The motivation is hard to determine. Yes, you have a “slight case” to argue that it was because you are older. With the scant facts available to me, I can’t render much of an opinion.

But as you can see, I have strong opinions about (a) false assessments of performance (which seems to be the case after your 9 good years), (b) fraudulent reports of “needs improvement” (which seems to be the case here), and (c) an obvious monetary motive – to deny severance (which seems to be the case here, too).

I would bring these apparent “improprieties” to the attention of senior-most executives, and possibly the Board of Directors, in emails, for (i) misrepresentation, (ii) fraud, (iii) breach of what is called the “covenant of good faith,” and (iv) defamation. I believe you may have a pretty darn good case, even on the little I know. See if sending a letter to the people on whose desks “the buck stops” resolves things. You might remind them that turning a blind eye to wrongdoing is wrongdoing, in and of itself, and they may one day be held accountable for doing so. 

If this does not work, I suggest you speak with a qualified employment attorney in your locale, and discuss with her or him what I have noted above. If they are a bit creative, aggressive and dynamic, I think you may do well in a negotiation.

Hope that helps. My views of “Forced Ranking” leading to “Performance Improvement Plans” and then “Denial of Severance” is fraud, fraud and then fraud. It is nothing less than shameful.

My very, very best to you. I hope this is helpful. And thanks, too, for reading our blog and writing in. I would very much appreciate it if you’d drop us a line letting us know how you did.

          Best, Al Sklover  

© 2010 Alan L. Sklover, All Rights Reserved.

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