If you ever want to spark a passionate debate within a company, bring up the concept of “stack ranking,” in which all employees in a particular team must be graded on a rigid scale from “excellent” to “poor,” even if every worker is a hard-working genius.
A number of companies have embraced stack ranking over the years, only to roll back that decision in the face of internal resistance. Microsoft famously stopped the practice after employees complained that it contributed to a toxic, hyper-competitive culture. But that doesn’t mean all firms have abandoned some form of it: For example, Yahoo reportedly still requires managers to place a certain percentage of workers in one of five ranking categories, which could result in some good workers being graded as underperformers.
In lieu of stack ranking, what’s the best way to encourage and reward performance without internal strife and backstabbing? In a new column in the Harvard Business Review, Amy Edmondson, a professor of leadership and management at Harvard Business School, offered a number of suggestions, including restructuring evaluations to reward teamwork more than individual performance.
“It starts with helping them reframe their colleagues as resources for achieving sought-after goals,” she wrote. “Team leaders can emphasize the opportunity for all team members to value and learn from their colleagues, so that the team can do spectacular work.”
Although she doesn’t delve into it, building teamwork revolves around building trust: Steps toward building that rapport can include sharing data, providing feedback, and involving employees in discussions about vital issues. Encouraging collaboration can curb inter-employee conflict, as can group rewards that emphasize the value of collaboration.
It’s true that some employees do their best work in a competitive atmosphere. But as many companies have demonstrated in the past, competition taken to its extremes can result in a culture that makes it difficult to achieve collective goals. Rewarding teamwork can sometimes prove a more efficient tool for achieving strategic priorities, whether you’re working for a startup or a tech giant.