Or the rank-and-yank system is a term originally coined by the employees of the Enron Corporation in the USA to describe their company's system of performance management. The system is based on the principle of forced ranking, where, for example, the top 10 per cent of employees might be marked as A-players and rewarded or promoted accordingly, the middle 80 per cent might be given a B-grade and the bottom 10 per cent given a C-grade. Managers responsible for systems of this kind are obliged to rank employees in this way. Those in the bottom, C-grade typically will be offered development in order to improve or else will be encouraged to leave the organization. Ranking-and-yanking is a common system of performance management for large private sector and some public sector organizations and according to estimates is growing. As many as a third of US corporations may use the system and there are indications that it is spreading in the UK. Alternative labels for ranking-and-yanking are bouncing and top-grading.
Subjects: Human Resource Management.