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Forced/Stacked Employee Rankings Crush Morale

An old trend in early elementary education and child care has resurfaced and has been causing controversy (and more than a few tears - shed by children and parents alike). The divisive method is known as the color-coded behavior chart. It's a system that's been used off and on for decades to simultaneously motivate and hold students accountable for their actions. These systems are also showing up in the workplace, and are being used to rank employees. But, does it work?

An old trend in early elementary education and child care has resurfaced and has been causing controversy (and more than a few tears – shed by children and parents alike). The divisive method is known as the color-coded behavior chart. It’s a system that’s been used off and on for decades to simultaneously motivate and hold students accountable for their actions. These systems are also showing up in the workplace, and are being used to rank employees. But, does it work?

color chart

(Photo Credit: t_a_i_s/Flickr)

First, let’s look at how the system “works” in classrooms.

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The behavior management technique functions like this: a teacher displays a color chart somewhere in the classroom, which labels and defines various levels of behavioral compliance by color. Students’ actions move them up and down through the colors according to how well they meet expectations throughout the day.

What’s the effect?

Admittedly, the color chart method does curtail some misbehavior. It turns out that avoiding “being on red,” while also absorbing the label of ill-behaved (or, even more powerfully, less-behaved-than-most), actually does work as a motivational tool for some. However, these charts have another effect…

An important thing to know about these systems is that achieving the highest level is extremely difficult, and it’s very hard for a great number of kids to process this. Doing everything right, meeting all expectations, actually isn’t enough to land you on the highest tier. So, no matter how well behaved a child is, no matter how carefully and accurately they do their work, it’s not enough to “get on gold.”

That much coveted reward is reserved for times when something exceptional occurs, a time when a student rises above and beyond expectations, or does something shockingly precocious and kind. For students who want desperately to please their teachers, their parents, themselves, not clearing this high bar can be pretty difficult to handle emotionally. Days upon days of being “on green,” the next-to-the-top level in this example (colors vary by classroom), but never getting to that upper-echelon, can be a soul-crusher to the well meaning, well-behaved, student.

In response, many teachers have stopped using the charts, feeling that the price is too high and that other systems that focus on building the relationship between teacher and student are more effective and humane.

So, why are these charts showing up in the business world?

Employers have used forced ranking, or stacked ranking, systems for years, both as a way to manage salaries and motivate workers. Employers rank on a bell-curve, with only about 10 percent of employees designated as top performers at any given time. It keeps salary increases and bonuses fixed and predictable, but it’s difficult to find any other benefit to the system, even for the employer.

Why some managers/employers hate it.

Some managers see the pros and cons of the system, but a great many managers harbor strong, negative feelings about stacked rankings. First of all, the last thing an employer wants is to negatively impact morale – and forced rankings do that. Second, but maybe most importantly, a good manager doesn’t feel that only 10 percent of their employees are outstanding. That’s the bar they set for everyone. And, they’d like to think that if someone wasn’t meeting those expectations, they wouldn’t still be around. So, this technique frustrates managers forced to use it, as they don’t agree with the basic premise, and struggle to stack employees accordingly, much less explain their rankings come review season.

Many good employees find it to be a harmful practice.

Actually, the system works for adults just like it does for kids. Not being able to achieve that top level is extremely frustrating and it crushes employee motivation. After a great year, a review that labels your performance as, “good,” or, “second tier,” or even, “on green,” is terribly disappointing — especially when considering that these rankings are often tied to salaries and bonuses. But, with only 10 percent on the top, 90 percent of employees living with forced rankings are dealing with this reality. Feeling underappreciated, undervalued, second-tier, is a real morale crusher, to say the least.

Perhaps building relationships to motivate employees makes sense instead, just like it does for students and teachers. These stacked ranking systems rely upon an archaic managerial logic that misinterprets the foundation of employee motivation. It’s high time we say an un-fond farewell to forced/stacked employee rankings. And, while we’re at it, let’s consider ending this practice in schools, too…

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